ADVANTAGES
-Training of local labor with more sophisticated techniques which on the long run will bring external benefits to the host country when these techniques can be used in an economic sector.
-raise the growth rate of host nation by introducing new investment and new technology.
-induce their local rivals to become more innovative and competitive
-promote improvement or. Development to various supporting industry or complementary industries contributions of taxation, plus providing the host country with foreign exchange that can be used to purchase vital imports
-raise the growth rate of host nation by introducing new investment and new technology.
-induce their local rivals to become more innovative and competitive
-promote improvement or. Development to various supporting industry or complementary industries contributions of taxation, plus providing the host country with foreign exchange that can be used to purchase vital imports
Disadvantages
-The competitive advantage they have over local firms may end up destroying local competition rather than promoting it.
-They can require their subsidiaries to operate policies that may be inefficient or create distortion in local market.
-Environmental destruction
-They may create uncertainty because foreign firms control the country within it by controlling part of its industries.
-They can require their subsidiaries to operate policies that may be inefficient or create distortion in local market.
-Environmental destruction
-They may create uncertainty because foreign firms control the country within it by controlling part of its industries.