Business – 6.1 External influences – International | e-Consult
6.1 External influences – International (1 questions)
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Model Answer:
- Advantages:
- Foreign direct investment (FDI) can increase capital availability, stimulating economic growth and infrastructure development.
- Technology transfer and managerial expertise improve productivity and can raise the skill level of the local workforce.
- Disadvantages:
- Profit repatriation can lead to a net outflow of earnings, reducing the host country’s retained wealth.
- Market dominance by MNCs may crowd out domestic firms, limiting competition and potentially leading to job losses in local industries.