The Pros and Cons of Multinational Corporations

Categories: Taxation

There are many appraisals made concerning multinationals. Most corporations tend to victimize others for their personal gain. Multinationals are fond of exploiting the host countries they go to and tend to bypass needy countries (Bhagwati 162). Multinationals always aim at making contacts with countries having political stability and economic advantages where their businesses can thrive resulting in maximum returns. No corporation can sustain real profits while incurring losses (Bhagwati 163). The preferences of the multinationals to invest in the well of countries also widen the bridge between the fortunate and the less fortunate in the society.

Notably, there is stiff competition among needy countries resulting in tax breaks aimed at attracting the multinationals. However, the outcome of these tax breaks is net losses for these developing countries (Bhagwati 164). It is evident that these large corporations take advantage of the small countries by making unrealistic demands. They quickly succeed in exploiting other nations since they are stronger in comparison with the smaller countries. Equally important, the larger corporations use gift horses in the form of aids as Trojan horses (Bhagwati 164).

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Besides, they possess monopoly power following the entry barriers they impose on new firms. The predatory nature of the corporation is evident based on the fact that they intrude into their host countries politics (Bhagwati 167). This intrusion is rampant in the countries with weak governance and corrupt leaders.

Taking the case of Chile, Pepsi and ITT corporations were the key players in the coup against the elected president, Salvador Allende (Bhagwati 168). Moreover, one of the typical critics against the multinationals is the tendency of exploiting their employees at the same time violating their labor rights (Bhagwati 173).

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They pay these workers meager wages that can barely sustain their lives. On the other hand, corporations teach domestic firms techniques to enhance productivity. They also define rules for world trading and intellectual property following their interest driven-lobbying (Bhagwati 182). The cons of the corporations outweigh their pros implying that they are more predatory than beneficial.


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The Pros and Cons of Multinational Corporations. (2022, Sep 10). Retrieved from

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