A host country is a nation that allows a multinational company to set up operations in its country. Multinational companies have varying impacts on host countries, some of which are beneficial whilst others are detrimental.
There are many advantages for the host country to benefits from the presence of multinational companies.
1. Job creation. Multinational companies create employment opportunities. They also tend to pay more than local firms in host countries. Training programmes will also improve the quality and efficiency of local workforce. Therefore, more of the local workforce will be employed to work in the multinational companies.
Example 1: Volkswagen produces cars in Kaluga, Russia. The investment created more than 3,500 jobs.Example 2: Toyota’s investment in France created 2,000 direct jobs and conceivably another 2,000 jobs in supporting industries.Example 3: Audi produces cars in Győr, Hungary. As of 2018, this investment created over 13,000 jobs.2. Boost to the local economy. Multinational companies help to increase the value of a country’s annual output by producing and selling high volume of products. They will also boost export earnings for the host country by selling products abroad. This will create consumption expenditure since more people are in…
