How are local companies benefitted by collaborating with multinational companies? Explain with examples.

Question

Philoid · Accepted Answer

Local companies benefit by collaborating with MNCs:

1. MNCs can finance the additional investments for the local companies like buying new machinery for faster production.

2. MNCs may provide the companies the latest technology for efficient production as MNCs have an international outreach.

3. Local companies will benefit financially through a partnership with an MNC because the production and its efficiency would naturally increase.

Explanation: An MNC works at an international level while local companies have a very small outreach. Therefore, a partnership with such a large company is only beneficial for both.