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

The increasing

number

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of multinational

companies

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in developing countries brings benefits

as well as

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drawbacks. There are some benefits of

this

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trend

such

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as the increase of foreign domestic

investments

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and job availability in the country.

However

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,

this

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trend could

also

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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

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is the addition of new

investments

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.

As a result

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, developing countries can use their

investments

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to fund essential services,

such

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as health and education.

Moreover

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, international

companies

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

This

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will decrease the unemployment rate and push more economic growth.

For example

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

opened

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opening

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itself to more foreign

companies

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, especially the manufacturing industry.

On the other hand

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, the growing

number

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of overseas

companies

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could hinder emerging local enterprises.

This

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is

due to

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the fact that many small and medium local

companies

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have small

investments

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and are not able to compete with bigger foreign

companies

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.

That is

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to say, the foreign

companies

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

In addition

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, because the market is filled by foreign

companies

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with high-quality goods, it is

also

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possible to see a decrease in local product purchases.

This

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

For example

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, nowadays many textile businesses in Indonesia are closed

due to

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

To conclude

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, the growing

number

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of multinational

companies

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

number

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of foreign

investments

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and an increase in job availability

while

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