‘Profit is like blood of businesses. When domestic markets do not promise a high frame of profits, business firms search for foreign markets. If some domestic companies expanded their production more in proportion to the demand, then they are forced to sell their excess production in foreign markets. Hindustan Machine Tools Ltd. Took up exports very seriously because of recession in the home country in the late 1960s. Competition can become a driving force for firms to become MNC because once competition starts in domestic markets, the week companies which are unable to meet the competition start entering international markets. Many governments provide a number of incentives & other support to domestic companies like tariff fees, less export duties, etc to invest in foreign markets. Monopoly power can be achieved due to resources, technological advances, product differentiations, exclusive market information being proactive stimulus.
Most of the countries today liberalised their economies & opened to the rest of the world. These changes in policies attracted the MNCs to extend operations to...
... middle of paper ...
... were, they are & they will continue to grow.
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