Several corporations in the developed economies have expanded their operations to other companies because of the following benefits to them and their home countries:

(i)    Multinational companies can exploit the foreign markets. Thus, the exports from the home country increase.

(ii)    Multinational corporations obtain income form abroad in the form of dividends, royalties, licensing fees and management contracts. Thus, their profitability is increased.

(iii)    Multinational corporations can acquire cheaper raw materials from foreign courtiers. By setting up plants in foreign countries, they achieve economies in the form of cheap labour and local materials.

(iv)    Multinationals can export part and components for assembling and selling in the foreign markets. Exports of TV kits, and auto parts to developing economies are quite common.

(v)    Multinationals render valuable services to the world economy by promoting international business and providing an efficient means of integrating national economies into a universal system.

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