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Geography

Globalisation

Transnational corporations

Globalisation has resulted in many businesses setting up or buying operations in other countries. When a foreign company invests in a country, perhaps by building a factory or a shop, this is called inward investment. Companies that operate in several countries are called multinational corporations (MNCs) or transnational corporations (TNCs). The US fast-food chain McDonald's is a large MNC - it has nearly 30,000 restaurants in 119 countries.

Examples of multinational corporations

Shell

A Shell filling station

A Shell filling station

The majority of TNCs come from MEDCs [MEDC: A More Economically Developed Country (MEDC) has high levels of development based on economic indicators such as gross domestic product (the country's income). ] such as the US and UK. Many multinational corporations invest in other MEDCs. The US car company Ford, for example, makes large numbers of cars in the UK. However, TNCs also invest in LEDCs - for example, the British DIY store B&Q now has stores in China.

Factors attracting TNCs to a country may include:

  • cheap raw materials
  • cheap labour supply
  • good transport
  • access to markets where the goods are sold
  • friendly government policies

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