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

The increasing

number

of multinational

companies

in developing countries brings benefits

as well as

drawbacks. There are some benefits of

this

trend

such

as the increase of foreign domestic

investments

and job availability in the country.

However

,

this

trend could

also

result in the lack of development of small and medium local enterprises and a decrease in the sales of local products. On the one hand, the main advantage of the increase in international

companies

is the addition of new

investments

.

As a result

, developing countries can use their

investments

to fund essential services,

such

as health and education.

Moreover

, international

companies

will open many high-quality job opportunities to the population.

This

will decrease the unemployment rate and push more economic growth.

For example

, Vietnam's economy has started to grow and its unemployment rate is declining after

opened

Wrong verb form

opening

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itself to more foreign

companies

, especially the manufacturing industry.

On the other hand

, the growing

number

of overseas

companies

could hinder emerging local enterprises.

This

is

due to

the fact that many small and medium local

companies

have small

investments

and are not able to compete with bigger foreign

companies

.

That is

to say, the foreign

companies

will take their market and make them more difficult to compete.

In addition

, because the market is filled by foreign

companies

with high-quality goods, it is

also

possible to see a decrease in local product purchases.

This

is because many people believe it is better to buy foreign products than local goods.

For example

, nowadays many textile businesses in Indonesia are closed

due to

their inability to compete with clothes from China and Vietnam that are more preferred by Indonesians.

To conclude

, the growing

number

of multinational

companies

in developing countries brings advantages and disadvantages. The advantages include a higher

number

of foreign

investments

and an increase in job availability

while

the disadvantages include the unequal competition for small and medium local businesses and a decline in local products' sales.