The impact of a multinational corporation on an LEDC
A part (d) model answer Case study- a multinational company
Name a multinational company and one country where it operates
Nike, Vietnam, Southern Asia
Explain how the MNC affects local people and the economy of that country. Use at least three developed ideas.
Nike is the World’s leading supplier of sportswear. It has many factories in Asia, including 24 in Vietnam. It has a major impact on both the Vietnamese people and its economy.
Thousands of jobs are created for local people which means they can improve their standard of living, including paying for health care. Wages in Nike factories tend to be higher than in local factories, so Nike employees are more advantaged and they can improve things for their families. This is likely to affect health and lead to a higher life expectancy
However, there is evidence that conditions in Nike factories are not good. The number of strikes in 2007/8 points to sweatshop conditions with workers expected to work long hours. This has a negative impact on the quality of life of local people. The majority of the workforce are young women, so those with children may not be able to take care of them.
The economy undoubtedly benefits from Nike’s presence. The wages paid to workers boosts the local economy because people have more to spend in shops and local businesses. Though more tax is paid in America (Nike HQ) local taxes are paid which are used to build important infrastructure such as roads and power supplies. This in turn helps other industry to grow, as does the success of Nike. Other companies are attracted to set up factories in Vietnam because they see that Nike (a very successful company) is operating there (a process called cumulative causation) and further boosts the economy of Vietnam.
Name a multinational company and one country where it operates
Nike, Vietnam, Southern Asia
Explain how the MNC affects local people and the economy of that country. Use at least three developed ideas.
Nike is the World’s leading supplier of sportswear. It has many factories in Asia, including 24 in Vietnam. It has a major impact on both the Vietnamese people and its economy.
Thousands of jobs are created for local people which means they can improve their standard of living, including paying for health care. Wages in Nike factories tend to be higher than in local factories, so Nike employees are more advantaged and they can improve things for their families. This is likely to affect health and lead to a higher life expectancy
However, there is evidence that conditions in Nike factories are not good. The number of strikes in 2007/8 points to sweatshop conditions with workers expected to work long hours. This has a negative impact on the quality of life of local people. The majority of the workforce are young women, so those with children may not be able to take care of them.
The economy undoubtedly benefits from Nike’s presence. The wages paid to workers boosts the local economy because people have more to spend in shops and local businesses. Though more tax is paid in America (Nike HQ) local taxes are paid which are used to build important infrastructure such as roads and power supplies. This in turn helps other industry to grow, as does the success of Nike. Other companies are attracted to set up factories in Vietnam because they see that Nike (a very successful company) is operating there (a process called cumulative causation) and further boosts the economy of Vietnam.