Question

1. List and explain, at least, two major reasons that proponents often use to justify the outflow of FDI/MNCs from home countries.

Answer 1

Answer: FDI is defined as the type of investment in which a foreign country's firm invest in domestic country and such investment is long term and establishes a physical infrastructure.

FDI's outflow is been justified by proponents due to various reasons: It is been argued that -

1.MNCs interfere in the domestic policies related to business and sovereignty of government is said to be eroded.

2.Profit ultimately shift to the foreign country in long run.Whereas domestic country only benefit in terms of employment.

3.MNCs often been criticised due to its negative impacts on domedtic MSMEs business, Example can be seen in form of Impact of Wallmart in Mexico's domestic industries.

Hope it helps!