TNCs: Advantages and Disadvantages

A mindmap showing the benefits and costs to a host country (usually LEDC) from TNCs

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  • Created by: Tilly
  • Created on: 14-01-13 17:25
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  • TNCs: Advantages and Disadvantages to HOST country
    • Brings work to country, uses local labour
    • Increase in GNP and personal income
      • More demand for products = growth of services and products
    • Prestige Value
    • Widens industrial variety (ie not just agriculture)
    • INWARD investment & foreign currency to country
    • Improvement in infrastructure
    • Improves education and skills of local people
    • Decisions made outside of country; firm could pull out at any time
    • Insufficient attention to H&S regulation and protection of environment
    • GNP growth slower than in Home country
      • Widening gap between developed and developing countries
    • Big schemes can increase national debt (ie by investing too much)
    • Very few skilled local people employed
    • Most profits go overseas
    • Local labour force usually poorly paid and have to work long hours


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