Business Studies Impacts on host countries
Impacts on host countries
Benefits
- Foreign currency
- Employment opportunities
- Local firms benefit from supplying services and components to the new factory
- Tax revenue to the government
- Management expertise improve cause of foreign supervisors
- Output of economy will increase, GDP will increase
Drawbacks
- Exploitation of local workforce
- Pollution
- Local competing firms squeezed out
- Reduction in cultural identity
- Extensive depletion of limited natural resources
State intervention to assist and control business activity
- Government assistance for business: training programmes, support for exporters, development area grants.
- Government controls over business activity: government should not limit because it will limit their ability to produce goods and services profitably, lasseiz faire: allowing business to make its own decisions without government intervention.
