Role of Multinationals in Global trade
The activities of multinational firms drive the process of economic globalization to a great extent. This paper explores some facts concerning their prevailing role in all sectors of globalization. As such, the importance of multinational firms in foreign direct investment (FDI) and the production abroad is also examined together with their contributions to international knowledge transfer and to foreign trade.
It is claimed that economic theory should account for the activities of multinationals in the evaluation of globalization process.Economic integration process has accelerated extraordinarily in the last years. The three main sectors of economic globalization; foreign direct investment (FDI), trade, and the international knowledge transfer have developed very dynamically (Jörn, 2001).
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Since fast growing markets are increasingly shifting to more far-away regions, the size of European firms will grow even more so long as they want to tap on these emerging business opportunities.Multinational companies have always been the engines of developments in global economic, technological transfer and deep the deepening globalization. They have sprung up not only in their local corporate context but also by creating new subsidiaries in the host economies and by acquiring subsidiaries through acquisitions and mergers.
This paper has examined the changing role of EU-based Multinational companies in the global economy relative to the key regions of the world. It has made conclusions after analyzing data according to researches on different countries in key regions of the world. As part of the historical analysis, it focused on the past years up to the previous great recession and made some extrapolations.
Eurostat, (2013). International Trade and Foreign Direct Investment.