multinational corporation

1. ALSO CALLED AS TRADE
BARRIER
Protectionism
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2. Free trade
Is trading without hindrance in the
form of barriers such as import
tariffs.
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3. Reasons for protection
 To help a infant industry to grow
 To protect domestic jobs
 Can be a source of government revenue
 To protect domestic industries against dumping (selling
at a price that is below the cost)
 To protect domestic industries from cheap subsidized
imports
 To protect strategic industries, e.g. electricity, gas, wind
and solar energy.
 To encourage green & environmentally friendly
technologies.
 To protect intellectual property rights
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4. Consequences of protectionism
 Competitors tend to take retaliatory action when they are
imposed. The net effect will be a reduction in global
trade.
 Distorts market signals and therefore can lead to a global
misallocation of resources.
 Can lead to increased costs of production due to the lack
of competition and of incentives to be efficient or
innovative.
 May protect jobs in the short term, but it is likely to lead
to slower economic growth overall.
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5. Impact of tariffs

6. Impact of quotas

7. Impact of subsidies

8. Warm Up
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This Photo by Unknown Author is licensed under CC BY-NC-ND

9. This Photo by Unknown Author is licensed under CC BY-SA-NC

10. This Photo by Unknown Author is licensed under CC BY-NC

11. This Photo by Unknown Author is licensed under CC BY-SA

12. This Photo by Unknown Author is licensed under CC BY

13. Multinational Corporations
 What is an MNC?
 An MNC maintains facilities and conducts business in
a minimum of one country abroad
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14.  What examples of MNCs have you seen when
you have traveled?
 Have you ever seen a fast food chain adopt
elements of the local culture into their menu?
Think About It
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15. Measuring the size of multinationals

16. Benefits & disadvantages of operating in
many countries
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• They gain access to
natural resources
that may be in limited
supply in their
domestic market.
• They can access a
source of labor
• They have the
opportunity for a
global market
There may be
different tastes,
requirements and
legal standards in
different countries.
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17. Benefits & disadvantages of operating to
host countries
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• bring
employment, new
products and new
technologies to
host countries
•Speed up
development
Not paying
enough for raw
materials and
employees
Caused
pollution
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18. Global Economic Organizations
 What international economic organizations
oversee the world economy?
 The World Bank: primarily designed to assist developing
nations in growing economically through aid, financing,
research, and guidance
 The International Monetary Fund (IMF): observes and
assesses the economic trends and climates across nations,
noting how differing nations’ economies affect one
another; promotes economic stability and helps or lends to
countries in need
 The World Trade Organization (WTO): regulates the
international rules of trade with the goal of promoting free
trade and benefitting all member nations
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19. Case study

20. ACTIVITY
 Research a multinational company that has its home
base in your country or operates in your country.
Find out:
 How many other countries it operates in?
 What is the current value of the shares in the
company?
 How many people does it employ?
 Give examples of the range of its products.
 Produce a poster or wall chart to display your
findings.