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Multinational corporations (MNC) are often divided into three broad groups:
  • Horizontally integrated multinational corporations manage production establishments located in different countries to produce same or similar products.

  • Vertically integrated multinational corporations manage production establishment in certain country/countries to produce products that serve as input to its production establishments in other country/countries.

  • Diversified multinational corporations manage production establishments located in different countries that are neither horizontally or vertically integrated.


Very large multinationals have budgets that exceed those of many countries. They can have a powerful influence in International Relations , given their large economic influence in politicians' representative districts, as well as their extensive financial resources available for public relations and political Lobbying .

Multinationals have played an important role in Globalization . Given their international reach and mobility, prospective countries, and sometimes regions within countries, must compete with each other to have MNCs locate their facilities (and subsequent Tax revenue, employment, and economic activity) within. To compete, countries and regional political districts offer incentives to MNCs such as tax breaks, pledges of governmental assistance or improved infrastructure, or lax Environmental and Labor Standards . This process of becoming more attractive to foreign investment can be characterized as a Race To The Bottom .

There is a dispute as to which was the first MNC. Some have argued that the Knights Templar , founded in 1118 , became a multinational when it stumbled into banking in 1135 . However, others claim that the Dutch East India Company was, which first appeared in 1602 .


CRITIQUES

In , one of the first systematic critiques of multinationals.


EXAMPLES



IN FICTION

  • In the Mars Trilogy , multinational corporations known as "metanational corporations" control governments.



SEE ALSO