What is the Role of MNCs in Developing Countries?

MNCs have contributed significantly to the development of world economy at large. They have also served as an engine of growth in many host countries. Their importance in a developing country may be traced as follows:

1. MNCs help a developing host country by increasing investment, income and employment in its economy.

2. They contribute to the rapid process of development of the country through transfer of technology, finance and Tnodern management.

3. MNCs promote professionalisation management in the companies of the host countries.

4. MNCs help in promoting exports of the host country.

5. MNCs by producing certain required goods in the host country help in reducing its dependence on imports.

6. MNCs due to their wide network of productive activity equalise the cost of production in the global market.

7. Entry of MNCs in the host country makes its market more competitive and break the domestic monopolies.

8. MNCs accelerate the growth process in the host country through rapid industrialisation and allied activities.

9. The growth of MNCs creates a positive impact on the business environment in the host country.

10. MNCs are regarded as agents of modernisation and rapid growth.

11. MNCs are the vehicles for peace in the world. They help in developing cordial political relations among the countries of the world.

12. MNCs bring ideas and help in exchange of cultural values.

13. MNCs through their positive attitude and efforts work for the establishment of social welfare institutions and improvement of health facilities in the host countries.

14. Growth of MNCs help in improving the balance of payment status of the host country.

15. The MNCs integrate national and international markets. Their growth in these days has remarkably influenced economic, industrial, social environment and business conditions.

In short, through basically seeking maximisation of profits by using all types of resources and strategies of the global economy, eventually globalisation has become the main focus of their business. In this way, it has become a main propelling force behind the expansion of world economy at large.