Business Studies Impacts on host countries

Impacts on host countries

Benefits

• 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

Drawbacks

• 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.