Effect of Multinational Corporations on Foreign Direct Investments (Research Paper Sample)

Multinational Corporations and Their Effect on Foreign Direct Investments
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Multinational Corporations and Their Effect on Foreign Direct Investments
Multinational corporations are critical global economy influencers through their impact on foreign direct investment (FDI). Academic and public opinions have been mired in inconclusive debates concerning multinationals and FDI's benefits and whether they need further support. Despite the ongoing debate, it is worth noting that multinationals spur foreign FDI through the horizontal, vertical, and conglomerate models, facilitating capital, human resources, and technological flows among countries.
Multinational corporations influence the horizontal FDI model, where the largest global companies invest in similar industries abroad. The extant literature reports that horizontal FDI is the leading investment model for companies operating globally (Cohen, 2017). Most international businesses venture into foreign markets where they produce similar products and services. Notably, horizontal FDI facilitates resource flows among nations. In most cases, multinationals originate from the developed economies, preferring to