Economics
What are the various ways in which MNCs set up, control or produce in other countries?
Answer
The various ways in which MNCs set up, control or produce in other countries are:
- Buying Local Companies — MNCs often acquire existing local production companies. By purchasing these companies, they gain access to established infrastructure, skilled labour, and market presence.
- Contract Manufacturing — MNCs place orders for production with small producers in other countries. These small producers manufacture goods on behalf of the MNCs.
- Partnerships (Joint Ventures) — MNCs establish partnerships with local companies. Joint ventures allow them to pool resources, share risks, and leverage local expertise.
- Wholly Owned Subsidiaries — MNCs set up their own subsidiaries in foreign countries. These subsidiaries operate independently but are fully owned by the MNC.
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