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Question
How do Multi-National Corporations (MNCs) interlink production across countries? Explain with examples.
Solution
The multinational corporations have spread their production and interaction across the countries in the following ways :
a. They set up production jointly with local companies. They provide money for additional investments like buying new machines for faster production.
b. MNC may buy up local companies and then expand production. For example, Cargill Foods, a very large MNC (USA), has bought smaller Indian companies such as Parekh Foods.
c. The MNCs provide efficient managerial and advanced technology for faster production and efficient use of resources.
d. Large MNCs in developed countries place orders for production with small producers. Examples are Garments, footwear, sports items, etc. The products are supplied to the MNCs, which then sell these under their own brand names to the customers.
e. MNC's procure raw materials for their production from local producers which has helped the latter to prosper and grow.
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