Multinational Corporations Specialized Topics Analyzed by the World Essay

Multinational Corporations Specialized Topics Analyzed by the World Investment Reports - Essay Example Global economic developments are driven by multinational corporations that seek to invest potential economies such as the transition and developing economies. Global economies’ potential has been expanded by multinational corporations through a variety of investment and production modes, which increase international competitiveness. More so, supporting measures built during the crisis have largely contributed to opening up of new investment opportunities for multinational corporations all over the world. Supporting measures include industrial and corporate restructuring, exit of state control and ownership of corporations, and rising valuations of stock markets. Although uncertainty and risk factors remain a major threat to recovery of FDI, supportive environment across the globe and particularly in developing countries has the potential to oversee tremendous recovery and even growth. China, being a developing country, has the largest foreign direct investments being channeled into its economy. ... However, multinationals hold back this potentials and economic opportunities mainly due to risk factors involved with investing in international economies whose prospects and success are unknown. The risks range from widespread debt crisis and rising inflation to financial and fiscal sector imbalances. Developing and transition economies have established favorable framework for foreign investment, which has attracted massive investment inflows from multinationals. On the other hand, developed countries alongside world’s poorest countries have recorded low foreign direct investment flows. Poor regions such as Africa have continually seen foreign direct investment inflows reducing, while developing regions such as the Latin America have recorded progressive increases. Least developed countries, small islands developing states and landlocked developing countries, being among the poorest countries, have continued to attract less foreign direct investment inflows. However, foreign direct investments have improved in natural resources such as oil industry in the African region. Investments in natural resources by multinational corporations are on the rise in African countries and have the potential to grow, although political uncertainties remain a huge hindrance to these possibilities. More on political uncertainties, industry diversity and volume limitations also remain a major barrier in Africa, which calls for harmonization of trade agreements if foreign direct investment growth is to be achieved. Transition and developing economies have increasingly become of vital importance to foreign direct investment with regards to both outflows and inflows. Multinational corporations are channeling their operations to developing and transitions countries owing to