Multinational Corporations

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What are multinational or transnational corporations?

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Large businesses that operate in several different countries.

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Where do multinational corporations usually have their headquarters?

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In one country, but they have assembly and production facilities in other countries.

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What role have multinationals played in globalisation?

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They have played an important role in the development and spread of globalisation.

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How do multinational companies often expand?

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By merging or acquiring other smaller companies.

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What is the large company in a multinational structure known as?

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The ‘parent company’.

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What is a subsidiary in the context of multinational corporations?

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A smaller company that the parent company either owns entirely or controls more than 50% of the voting share.

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What is one reason why companies become multinational?

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To increase their market share.

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What is another reason why companies become multinational?

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To secure cheaper premises and cheap labour.

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Why do companies become multinational to avoid trade barriers?

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To avoid trade barriers, foreign exchange fluctuations, and transport costs.

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What is a financial incentive for companies to become multinational?

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To receive government grants or pay less tax.