MNCs/TNCs and Their Roles in the Global Economy
International trade is important because it encourages the production of goods and services through multinational corporations (MNCs) or transnational corporations (TNCs). By definition, MNCs or TNCs are those commercial entities that are characterized by international production of goods and services, overseas investment, addition to income and asset management in various nations (Isaac et al, 2020). MNCs contribute immensely to the creation of employment opportunities in the host countries. In the past decade, for instance, MNCs have been responsible for the millions of employees working in developing nations (Isaac et al, 2020). Moreover, the enterprises are crucial in channeling financial and physical wealth through to those counties with declining capital and infrastructural shortages (Isaac et al, 2020). As a result, wealth is created which then generates employment opportunities. Therefore, MNCs are good because they essentially improve the economic activities of developing nations through sustainable wealth production through the exploitation of the available natural resources.
Globalization and Its Impacts on the Improvement of Living Standards
In connection with international trade is globalization in the twenty-first century. Globalization has led to improved living conditions in many nations in the world. As there is increased usage of science and technology across the world, many businesses are thriving through the application of the innovations and therefore making them more efficient (Isaac et al, 2020). Additionally, new markets have been opened up as a result of globalization because of new customers and diverse profit sources. The acquisition of products is made easy and therefore encourages competition between the firms which offer the same services, therefore the quality of the products made is also improved (Isaac et al, 2020). Also, globalization has enabled companies to establish lower-cost ways to produce goods and services at lower prices; as such the nationals of less developed nations can live more comfortably for less money. Undoubtedly, globalism is a prime factor in the improved living conditions in the current world.
Reference
Isaac, K., Ibidunni, A., Kehinde, O., Ufua, D., Elizabeth, K., Oyo-Ita, D., & Mathias, C. (2020). The responsibility of MNCs in international economic application: Literature review.Decision Sciences and Management Information Journal, 23(5), 619-628. Web.