Growth of importance of MNCs in recent decades
Increasingly,
giant MNCs have come to dominate markets on a world scale, such that
they now account for a significant proportion of the world's output.
This increase in importance may be attributed to various factors,
including:
- The growth of international trade
- The trend towards globalisation
- The desire to achieve profit maximisation through economies of scale and strategies such as transfer pricing
- The growth of powerful economic blocs, e.g. the EU, NAFTA
- Advances in communications and information technology
- The liberalisation of former communist economies
- low cost factor inputs,
- a regulatory framework that favours profit repatriation and
- favourable tax rules.