MULTINATIONAL ENTERPRISES

Multinational Enterprises



Multinational Enterprises

Introduction

Multinational Enterprises (MNEs) have become a major driver in the global economy and their importance continues to grow all over the world. The increased influence of multinationals in developing countries is particularly striking the news. Today developing countries account for nearly one third of total outstanding entries foreign direct investment (FDI), against just over one fifth in 1990. The increase of FDI in developing and emerging economies suggests that it may contribute to their development to the extent they can derive significant benefits from it including job creation quality and the introduction of modern production technology and management. This is also the reason why many governments have introduced policies to attract foreign direct investment from abroad. However, the activities of multinationals are also very controversial and create concerns in public opinion. Many MNEs are accused of unfair competition, because they take advantage of lower wages and poor working conditions observed in some foreign countries. They are also accused of violating human rights and labour rights in developing countries where the authorities do not truly respect these rights. In many countries, civil society calls MNEs encourage their implementation in all their subsidiaries abroad standards work adopted internationally.

Companies that do business in foreign countries are subject to the laws and rules regulating the countries in which they operate. Possible changes in these laws and regulations that threaten the political risk for companies as they may affect the value of deals that these companies make in those countries. Management of international funding includes evaluation of the policy impact changes on the conduct of affairs in the country and manage these changes within their means. National governments are sovereign. They can carry out regulatory functions, impose taxes, to control the business and investment activities within their country and do it as they see fit. Although these countries are subject to international treaties and multilateral organizations participating, they can if they wish to violate the obligations that are imposed on them, these treaties and rules of membership in any organization.

Foreign Direct Investment

Foreign direct investment increased in the industrialized countries over the past year by 21 percent to over a trillion dollars. This has been going out of the World Investment Report 2001, released today by the trade and development conference coarse United Nations (UNCTAD) is published. With U.S. $ 176 billion for the first time, Germany is the largest recipient of foreign direct investment in Europe and occupies the second place worldwide behind the United States with U.S. $ 281 billion.  This deal demonstrates the importance of cross-border mergers and acquisitions that make up the major share of foreign direct investment in industrialized countries (Habibullah, 2002, 279).

Great Britain received high FDI inflows last year. The inflow of foreign capital into the UK rose by 57 percent to GBP 130 billion, which was two and a half times as compared to Canada of U.S. $ 63 billion. Canada had noted in the past, an unprecedented flow of FDI outflows and what is due to several mergers and acquisitions with partners ...