Beruflich Dokumente
Kultur Dokumente
Acquiring Resources
Some resources may be scarce in home country These resources may be abundant in host nation Cheap and skilled labour in India
Minimizing Risk
Operations of a firm in one nation is risky Recession, law and order, natural calamities, political instability etc Fall in demand in one nation, expansion in other nation
Economies of scale
Large scale procurement & production Use of modern machines, division of labour Specialisation, better utilisation of resources
Advantage of monopoly
Modern technology Patents
Incentives by govt.
Concessional loans Tax incentives subsidies
Healthy competition
Competition improves efficiency Costs go down Inefficient domestic manufacturers cant exploit the consumers
Comparative advantage
Each country focuses on those goods for which it has comparative advantage Benefits of specialisation
Dumping
Uncertainty
At the time of crisis when money is needed most foreign firms withdraw their money to invest it somewhere else