Porter's Five Forces
International Business (C11IB1)
How has the global financial crisis impacted upon MNCs?
Name: Kanam Liu Reg number: 095922098 Module lecturer: Dr Colin Turner Date: 19th October 2012
Introduction
Since world trade began and the economy grows quickly, Multinational Corporations (MNCs) are playing a very important role in the global economy in the last few decades. They produce and allocate goods and services for different nations, also help to share ideas, technology and increase innovations throughout the world. Nowadays, there are more than 82,000 MNCs and around 810,000 affiliates operating all over the world and 500 biggest corporations controlled 70 per cent of the international trade, they are very powerful of influencing in both economy and political way[1]. (Share The World's Resources, 2012) They operate productive assets in more than one country; they normally based their headquarters in a single country (mostly in US, Western Europe and Japan) and invest their facilities which are located in other countries. (Ovidius University, 2010) In order to see how global financial crisis will put an impact on these MNCs, we first need to establish the key factors which caused the global financial crisis.
Background of the global financial crisis
Financial crises happen very often but when it comes, people are still very surprised and are not prepared. Crises happens almost every 10 years from 19th century, the most important financial crises are the Great Depression in 1929, Asian Crisis in 1997, crisis in Argentina during 2001-2002 and the current financial crisis started from 2007. According to the Reinhart and Rogoff (2008), they indicated that crises were usually led by credit booms and real estate bubbles; it result to fall in house pricing and output, increase unemployment and government debt. I
How has the global financial crisis impacted upon MNCs?
Name: Kanam Liu Reg number: 095922098 Module lecturer: Dr Colin Turner Date: 19th October 2012
Introduction
Since world trade began and the economy grows quickly, Multinational Corporations (MNCs) are playing a very important role in the global economy in the last few decades. They produce and allocate goods and services for different nations, also help to share ideas, technology and increase innovations throughout the world. Nowadays, there are more than 82,000 MNCs and around 810,000 affiliates operating all over the world and 500 biggest corporations controlled 70 per cent of the international trade, they are very powerful of influencing in both economy and political way[1]. (Share The World's Resources, 2012) They operate productive assets in more than one country; they normally based their headquarters in a single country (mostly in US, Western Europe and Japan) and invest their facilities which are located in other countries. (Ovidius University, 2010) In order to see how global financial crisis will put an impact on these MNCs, we first need to establish the key factors which caused the global financial crisis.
Background of the global financial crisis
Financial crises happen very often but when it comes, people are still very surprised and are not prepared. Crises happens almost every 10 years from 19th century, the most important financial crises are the Great Depression in 1929, Asian Crisis in 1997, crisis in Argentina during 2001-2002 and the current financial crisis started from 2007. According to the Reinhart and Rogoff (2008), they indicated that crises were usually led by credit booms and real estate bubbles; it result to fall in house pricing and output, increase unemployment and government debt. I