International Investment And World Trade

Currently, there is an estimated 40,000 multinational corporation’s world wide in and approximately 250,000 overseas collaborations running cross-continental operations. Globalization has allowed access to markets via technology and has reduced distribution, lower internal coordination costs. It has also allowed for networking of specialized services and products in support of corporate functions through business process outsourcings (BPO’s) whether within the companies’ internal operations or its external activities. With the current communications and management technologies available, more companies are able to make the most out of international trade liberalization. Today, multinational corporations are expanding themselves to increase their markets, increase brand presence and image and benefit from inexpensive raw materials and labor. As mentioned, the major reason for multinational expansion is accessing a wider market. Though there has been some setbacks because of international financial crises and recession, trends in Asia, particularly China and India, have been able to sustain interests. Among the developments that are being considered as return of Coca-Cola to India, the ranking of Asia as the most attractive foreign direct investment region and the growing success on BPO’s in India and the Philippines. The opening up of the banking industry in China December 2006 is a good example of this motivation. It has been one of the most anticipated developments in the global market. The sheer size of the Chinese market remains to be the greatest attraction to most prospective new entrants. Other benefits for companies include reduced labor, materials or overall operation costs. A significant benefit of going global is establishing brand and product presence. Many companies have also benefited from the market variation that globalization has provided them increasing product efficiency and marketability.