Business Studies Impacts on host countries

Impacts on host countries


  • Foreign currency
  • Employment opportunities
  • Local firms benefit from supplying services and components to the new factory
  • Tax revenue to the government
  • Management expertise improve cause of foreign supervisors
  • Output of economy will increase, GDP will increase



  • Exploitation of local workforce
  • Pollution
  • Local competing firms squeezed out
  • Reduction in cultural identity
  • Extensive depletion of limited natural resources

State intervention to assist and control business activity

  1. Government assistance for business: training programmes, support for exporters, development area grants.
  2. Government controls over business activity: government should not limit because it will limit their ability to produce goods and services profitably, lasseiz faire: allowing business to make its own decisions without government intervention.










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