Multi-national corporations MNCS

& foreign Collaborations

A multinational corporation (MNC) is a corporation or an enterprise that manages production or delivers services in more than one country.

Types of MNCs

Horizontally integrated multinational corporations

Vertically integrated multinational corporations Diversified multinational corporations

What is FOREIGN DIRECT INVESTMENT

FDI occurs with the purchase of physical assets or a significant amount of ownership (stock) of a company in another country in order to gain a measure of management control.

 An investor or investment fund that is registered in a country outside of the one in which it is currently investing. Institutional investors include insurance companies, pension funds and mutual funds etc. The term is used most commonly in India to refer to outside companies investing in the financial markets of India. International institutional investors must register with the Securities and Exchange Board of India to participate in the market.

Foreign collaboration

Collaboration meaning- working jointly on an activity, venture or a project. Joint participation of foreign and domestic. There are three kinds
Joint participation between private parties between foreign firms and Indian government between

foreign government

government

and

Indian

Two types of foreign collaborations

Financial collaboration (foreign equity participation) where foreign equity alone is involved Technical collaboration (technology transfer) involving licensing of technology by the foreign collaborator on due compensation.

Main role of SEBI

INVESTOR PROTECTION
REGULATORY ROLE DEVELOPMENTAL ROLE

Segments of the capital market

Investors Capital seekers Regulatory bodies The stock exchange The registered intermediaries

Following are the reasons why multinational companies consider India as a preferred destination for business:

Huge market potential of the country FDI attractiveness Labor competitiveness Macro-economic stability

Advantages of MNC's in India

Increase in job opportunities Better and cheaper products will be available to the consumers The government will also benefit by earning more in taxes etc It will lead to an increase in infrastructure improvement

Disadvantages of MNCs in India

MNCs create monopolies in the market and eliminate local competitors. MNCs may create depletion of resources due to its continues use by these overseas companies. MNCs generally carry out their R&D in their home country and supply to the host country. MNCs generally import huge raw materials due to its continuous use by these overseas companies.