The Role of Multinational Companies (MNCs) (Cambridge (CIE) IGCSE Economics): Revision Note

MNCs earn profits from their operations abroad and often send this money back home, helping the home economy

Host countries get some benefit if profits are reinvested locally, but often lose some income

Home country businesses can sell to new customers abroad, growing bigger and stronger

Host countries get more product choices and access to new technologies

MNCs can produce goods more cheaply abroad and offer lower prices at home

Host countries may benefit from cheaper production and local job creation

MNCs can survive better if they sell in many countries. If sales fall in one place, they can rely on others

Host countries may experience more stable job markets if MNCs stay even during global downturns

Some jobs move abroad where production is cheaper, leading to unemployment at home

Host countries may become too dependent on MNCs for jobs. If an MNC leaves, many people could lose their jobs

MNCs may be criticised at home for allowing bad working conditions abroad

Workers in host countries may face low wages and poor conditions

MNCs might pressure home governments for favourable rules

In host countries, MNCs might influence politics and gain too much control

MNCs can be blamed for pollution caused in host countries

Host countries might suffer from environmental damage if rules are weak