Multinational Corporation
Multinational Corporation (MNC), sometimes called transnational corporation or international corporation, business that produces or distributes products or services in one or more foreign countries by establishing a branch or affiliate there. A branch is a part of a company that is located in another country. An affiliate is a company partially or entirely owned by another company. MNCs engage in foreign direct investment (FDI)—that is, investment in one country by citizens of another country. Sometimes such investment involves acquiring an existing company. In other cases MNCs undertake what is known as greenfieldinvestment by creating new facilities or activities.
Before World War II (1939-1945), most MNCs established foreign operations to secure sources of raw materials, and developing countries were the largest recipients of worldwide FDI. After World War II the foreign activities of large corporations increased significantly. In the 1950s and 1960s large numbers of
Most MNCs are very large corporations based in developed countries. About half of the 600 largest MNCs have headquarters in the
The tremendous growth and spread of MNCs has sparked controversy. Some people believe that MNCs contribute to unemployment in the country where they are based by hiring foreign workers for overseas branches or affiliates. Some people also believe MNCs exploit the people and resources of other countries. However, others argue that MNCs create more jobs than they eliminate and that MNCs bring capital and technology to areas that need it.
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