Chapter 25

Multinational Companies and

Foreign
Direct Investment

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 Learning Objectives

● Describe the link between multinational firms and FDI

● Understand about the FDI and MNCs in emerging countries
like India and China

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 MNC – Definition and Categories

● Criticism against Multinational Corporations

● The Form of FDI: Acquisitions vs Greenfield
Investment

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 Multinational Corporations in India

● Economic Reforms in India

● Foreign Direct Investment and Economic Reforms
● Characteristics of MNCs in India
o Origin and Size

o Emerging Market Experience

Contd…

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 Multinational Corporations in India Contd.
o Sector Focus

o Mode of Entry

o Market Orientation

o Resources

• Factor Markets and Institutional Environment

o Labour

o Institutional Environment

o Product Markets

Contd…

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 Multinational Corporations in India Contd.

o Technology

o Performance of MNC Affiliates

Case: WAL-MART’s FDI in China

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