POLI 243 Chapter Notes - Chapter 8: Foreign Direct Investment, Market Failure, Horizontal Integration

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Chapter 8 - multinational corporations in the global economy. Multinational corporations occupy a prominent and often controversial role in the global economy. When a corporation based in one country creates a new production facility in a foreign country or buys an existing one, it extends managerial control across national borders. Because they operate simultaneously in multiple political systems/governmnets, they have been the subject of considerable controversy among governmnets and international political economy. The standard definition of mnc: controls and manages production establishments in at least two countries, place multiple production facilities in multiple countries under the control of a single corporate structure. Simultaneously engaged in economic production, international trade, and cross border investment. Important source of foreign capital for the countries that host their affiliates. Started late 19th century: although its not new, what is important is that its growing rate. Although they have global reach, their activities are overwhelmingly concentrated in the advanced industrialized countries.

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