Benefits of multinational corporations

1. Promote the growth of international trade

In 1993, the number of multinational companies in the world reached 37,000, and their overseas subsidiaries totaled 170,000. Since 1982, multinational companies have grown very rapidly. By the end of 1992, global overseas direct investment had accumulated to US$2 trillion, one-third of which was in the hands of the top 100 large enterprises. In 1992, overseas sales of global multinational corporations totaled US$5.5 trillion, US$1.5 trillion higher than merchandise exports.

It can be seen that the overseas investment of multinational companies plays a greater role in the world economy than domestic trade. In fact, multinational corporations have become the most active and influential force in contemporary international economy, science and technology, and international trade. And this power will be enhanced with the overall upward trend of investment by multinational companies.

2. The development of multinational corporations has greatly promoted the foreign trade of developed countries after the war.

These effects include enabling developed countries’ products to be produced and sold in host countries through foreign direct investment, thereby bypassing trade barriers and improving the competitiveness of their products; from raw materials and energy From a perspective, it reduces the dependence of developed countries on developing countries; it also makes it easier for products from developed countries to enter and utilize the foreign trade channels of host countries and to easily obtain business intelligence information.

3. Foreign direct investment and private credit from multinational companies have supplemented the shortage of import funds in developing countries.

4. The capital inflow of multinational companies has accelerated the changes in the commodity structure of foreign trade in developing countries. After the war, developing countries introduced capital, technology and management experience from foreign companies and vigorously developed export processing industries, which enabled certain industrial sectors to achieve technological leaps and promoted changes in the commodity structure of foreign trade and the development of the national economy.

5. Control the trade of finished products and raw materials

Multinational corporations control the trade of many important finished products and raw materials. More than 40% of the total sales of multinational companies and 49% of foreign sales are concentrated in four sectors: chemical industry, machine manufacturing, electronic industry and transportation equipment.

Baidu Encyclopedia-Multinational Enterprises