Q. 3 E4.2( 14 Votes )

Write a note to explain the effects of the following:

The decision of MNCs to relocate production to Asian countries.

Answer :

Wages were relatively low in Asian countries. Thus, they became attractive destinations for investment by foreign MNCs competing to capture world markets. The relocation of industry to low-wage countries stimulated world trade and capital flow.

Impact of MNC’s decision to relocate production in Asian Countries:

● It provided for cheap labor to MNC’s

● It stimulated world trade and increased capital inflow in the Asian Countries

● Brought about new technology and production methods to the Asian Countries.

● Greater choice of goods and services to the people with the greater employment opportunities for Asian countries.

● Rapid economic transformation resulting in the growth of economies like India, China.

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