The Successes and Problems of Mnes in Exploiting the Opportunities in Emerging Markets

Topics: Investment, Developing country, Economics Pages: 2 (584 words) Published: March 24, 2013
The successes and problems of MNEs in exploiting the opportunities in emerging markets A multinational enterprise is a large corporation with business interests that transcends national boundaries. Due to globalization, multinational enterprises (MNEs) now drive emerging economies, influencing indigenous companies, and the well-being of host nations. The opportunities presented by emerging markets for multinational enterprises, have its’ fair share of successes, and challenges.

The successes of multinational enterprises (MNEs) in exploiting the opportunities in emerging markets Trade and investment windows have been opened, occasioned by the evolution of supranational institutions and contracts, leading to diminished interference by governments in business affairs, and reduced scope for industrial policy at national or sub-national levels (Ramamurti, 2001). These bring about a favourable balance of payment for the emerging market, attended by capital inflows, through final, and intermediate goods export to world markets, service exports, for example, tourism and business travel receipts, and foreign direct investments. The activities of multinational enterprises have stimulated economic growth in host economies, through international trade and foreign direct investments. Imports, like intermediate goods for local assembly and sale, machinery for local production facilities, and technology transfer have provided an enabling environment for economic growth ( Grossman and Helpman 1991), with the positive, linear relationship between foreign direct investment and technology transfer a pointer of the ‘new growth theory’ being advocated (Wang 1990, Walz, 1997).

The problems of multinational enterprises (MNEs) in exploiting the opportunities in emerging markets Multinational enterprises, of necessity, partner with local firms in order to exploit the opportunities presented by the low cost of doing business in an environment whose local policies the given...
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