Multinational corporations, also known as
transnational corporations, are those corporations which conduct business in
more than one country, or those which deliver services to more than one
country. In general, the company will only have headquarters in one county, but
they conduct business in other countries.
Multinational corporations are important to
the economy of the countries where the headquarters are located, as well as in the counties where they conduct business. However, that economic impact is not
always positive, as a multinational corporation may take away business from
smaller corporations which conduct business in that country. In either case,
transnational corporations played and continue to play an important role in
globalization and the relationships between differing countries which may rely
on one another for certain types of business, including exporting and
Some transnational corporations offer
employment opportunities in countries that would otherwise have very few. In
addition, a multinational corporation may also contribute to each local economy
where business is conducted in a positive and beneficial manner. There are also
issues of taxation which cross international borders with transnational
corporations, allowing many countries to enjoy the tax benefits of that entity.
A transnational corporation can greatly
influence the relationship between the countries where business is conducted.
In fact, many multinational corporations enjoy tax breaks as
an incentive to doing business in specific counties. That strengthening of
relationships between counties also helps the economy in those countries, as
well as has an influence over the global economy.