Multinational corporation
Also called: MNC, Transnational corporation · Topic: The Making of a Global World · NCERT: Class 10, Ch 3 "The Making of a Global World"
Meaning
A multinational corporation (MNC) is a large company that works in several countries at the same time. NCERT says the first MNCs were set up in the 1920s. They spread widely in the 1950s and 1960s. From the late 1970s, MNCs moved factories to Asian countries where wages were low. This changed the economic map of the world.
Example
In the 1950s–60s, many governments put high import tariffs (taxes on foreign goods) on goods coming from abroad. So MNCs set up factories inside many countries and became "domestic producers" there. From the late 1970s, MNCs shifted production to low-wage countries such as China. China had re-entered the world economy under new economic policies after being cut off since its 1949 revolution.
Don't confuse with
- Chartered trading companies (such as the English East India Company): These older companies traded and ruled territory with special rights from their government. They were not the modern MNCs that NCERT dates from the 1920s.
Related concepts
- Bretton Woods Conference
- Bretton Woods system
- International Monetary Fund
- World Bank
- Fixed exchange rate
- Marshall Plan
- General Agreement on Tariffs and Trade
- Group of 77
- New International Economic Order
- Floating exchange rate