1.6 Multi National Companies

Multinational companies can intensify competition in the host country, thereby affecting the survival of local businesses.

• TRUE

• FALSE

A business that has headquarters in one country but operates or is legally registered in two or more countries is known as a strategic alliance.

• TRUE

• FALSE

Multinational companies spend money on foreign direct investment (FDI) in overseas markets.

• TRUE

• FALSE

A business that only exports products to overseas markets is not classified as a multinational company.

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• FALSE

The growing presence of multinational companies, and the convergence of habits and tastes brought about by globalization, can cause a loss of local diversity.

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• FALSE

Improved communications, the reduction in barriers to trade, and the increasing reliance on  the Internet are all reasons for the rapid growth of multinational companies.

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• FALSE

Large multinational companies can account for a significant number of job opportunities in the host country.

• TRUE

• FALSE

Foreign direct investment (FDI) refers to cross-border investment in which an overseas company establishes an ongoing and significant stake in its operations in another country.

• TRUE

• FALSE

A highly profitable multinational company benefits the host country’s government as they pay larger amounts of corporate taxes.

• TRUE

• FALSE

To be classified as a multinational company, the business must operate in more than two different countries.

• TRUE

• FALSE