Multinational Corporation Assignment Example | Topics and Well Written Essays - 2000 words

Multinational Corporation Assignment Example | Topics and Well Written Essays - 2000 words

Multinational Corporation - Assignment Example In reality, many international investors are seemingly small and weak. For instance, multinational firms originating from developing countries have become a visible force in the world of FDI (Wells, 1983) Small and medium-sized firms also play significant roles in outward investment (Buckley et al, 1988), which have benefited many countries, thereby ending up in predicting future threats. "FDI is a cross-border production activity that takes place for a number of reasons. Investment decisions are affected by market size and cost differentials, with firms investing in locations with relatively low production costs". (Barrell, 1997) After grappling with the question of why MNCs engages in International production, four theories are identified that attempts to explain four motivations for FDI, named Monopolistic Advantage Theory, Oligopolistic Reaction Theory, Internationalisation Theory and the Eclectic Paradigm.