The Effect Of Multinational Corporation On The Nigeria ECONOMY

THE EFFECT OF MULTINATIONAL CORPORATION ON THE NIGERIA ECONOMY

Introduction to Chapter One:

1.1 Background to the Study

The rise of multinational corporations was completely unforeseen by the classical theory of international trade, which was initially articulated by Adam Smith and David Ricardo and is partially based on the development of contemporary communications and transportation technologies. This theory, which is based on the comparative advantage principle, proposes that each country should focus on producing and exporting the things that it can create most economically while importing the goods that other countries can produce more effectively.Africa’s Economy

This theory, which only addresses the trade in commodities and is static rather than dynamic, is based on the idea that while white goods and services can be transported across borders, factors of production like capital, labor, and hands are comparatively immobile. It also ignores the role of uncertainty, economies of scale, and technology in global trade.Contrary to Smith and Ricardo’s hypotheses, the entire existence of multinational corporations is premised on the global mobility of specific production elements. A pharmaceutical company with its headquarters in Wise may use money acquired in London on the Eurodollar market to fund the purchase of equipment by a Brazilian subsidiary. Africa’s Economy

The multinational enterprise differs from other businesses involved in worldwide trade because of the innate global distribution of resources by a single centralized management. With consideration for the corporation as a whole, decisions are taken about market entry strategy, ownership of international operations, production marketing, and financial activities. The emphasis placed on group performance rather than the performance of its individual parts can be used to identify the actual multinational firm.One of the multinational firms, which are enormous actors and think globally, is at the center of the discussion over globalization. Their presence is frequently linked to the globalization phenomena itself. These actors have increased their exposure, clout, and influence, making them a factor in the formulation and execution of the “global agenda” at all levels. MNCS have fueled great technological growth and produced enormous wealth.Africa’s Economy