Multinational companies are becoming increasingly common in developing countries. What are advantages and disadvantages of this?

The growing dominance of transcontinental business units in impoverished nations is a common trend these days. Various notable merits and demerits are associated with

this

trend, which are elaborated in subsequent paragraphs. It is easy to comprehend why

this

phenomenon is considered to be advantageous. The preponderant reason is that it not only brings employment, but

also

improves the economy of the poverty-stricken country. If multinational companies set-up their footsteps in developing countries, these firms definitely recruit personnel who can work over there;

consequently

, unemployed youth will get a chance to work and the employment rate would drop significantly.

Besides

, for operating in necessitous realms, these foreign companies have to take license from the government of recipient nation and in return they pay an astronomical proportion of capital in the form of taxes; resultantly, the economy of underprivileged nation fosters. Despite these benefits, there are some surprising disadvantages of transnational firms. The inclination of global companies not only causes the downsizing of domestic market, but

also

environment distortion. The local merchandise is unable to compete with international organizations because they provide better product in terms of quality, quantity and price. Who wants to purchase the local average quality item when one has the option to avail the international branded product at an affordable price?

Moreover

, being operated in developing countries, they utilize the natural resources of that particular country. After using natural resources, they throw the garbage in the open which end up with polluting the environment.

For example

, Ludhiana, a state of Punjab, is known as an industrial hub because an overwhelming majority of the industries are established here, and the environmental devastation is on its peak point. Conclusively, despite the fact, multinational firms are beneficial from employment and economic perspective, it has long-lasting damaging effect on domestic trade and atmosphere.