INTRODUCTION
1.1 Background of the Study
The historical origin of multinational corporations can be traced to the major colonizing and imperialist ventures from Western Europe, notably England and Holland, in the 16th century. During this period, firms such as the British East India Trading Company and Dutch East India Company were formed in 1600 and 1602 respectively, to promote the trading activities or territorial acquisitions of their home countries in the far East, Africa and the Americas (Aldana and Posadas, 1994).
John (1993) asserts that with the advent of industrial capitalism and its consequences in the 19th century, the development of the factory system, larger, more capital intensive manufacturing processes, better storage techniques and faster means of transportation, the need to expand businesses beyond international boundaries arose. Before the independence in 1960 and thereafter, more and more international companies continue to find their way into the Nigerian economy. Even till now, more of these large organizations are still being encouraged to come and invest in Nigeria. Multinational companies have remained a part of the business scene throughout the history of Nigeria.
Oladun (2012) citing Kuratko and Hodgetes (2004) posits that Nigeria is presently witnessing an emerging entrepreneurial development in various sectors of the economy. This trend is championed by the presence of multinational corporations (MNCs), which are responsible for independent/sole venture capital development, joint venture collaboration and complex intra and inter-industry relationship. The MNCs use this strategy to develop comparative upper reach in industrial structure, over and above their domestic counterparts.
Multinational corporations are business entities that operate in more than one country. A typical multinational corporation (MNC) normally functions with headquarters that is based in one country (parent country) while other facilities are based in locations in other countries (host countries). In some circles, a multinational corporation is referred to as a Multinational Enterprise (MNE), Foreign Direct Investment (FDI) or a Transnational Corporation (TNC) (Tatum, 2010). The idea of multinational corporations has been around for centuries but in the second half of the twentieth century, multinational corporations have become very important enterprises.
The economic growth and development of any nation is traceable to so many factors, among which investment is major. For an economy to grow and develop, it must divert part of its resources from current consumption and invest it on capital formation (Nuruzzaman, 2005). But many poor countries of the world are plagued by shortage of domestic savings and capital that can be put into such investment purposes. The alternative to this is to attract direct foreign investments in order to bridge the gaps created by shortage of domestic savings or capital. According to Anthony (2007), foreign direct investments occur when foreigners either wholly or jointly with local investors establishes their physical presence in another country through the acquisition of physical assets such as factories, buildings, plants, machineries, etc. The foreign entrepreneurs that engage in such ventures are referred to as Multinational Corporations (MNCs). Onyeanu (2010) states that the term multinational corporation (MNC) and transnational corporation (TNC) are used interchangeably.
The activities of multinational corporations are supportive to the economic growth and development of many countries including Nigeria. Howell (1998) notes that MNCs are capable of contributing to the growth and development of real output direct investment in the production of tangible goods. Multinational direct investment generates and expands businesses, stimulate employment, raise wages and replace declining market sectors.
Parent companies of transnational corporation systems do support their overseas affiliates by ensuring that appropriate human and material resources are put in place. When the crowding-in effects of multinational direct investment supersedes it’s crowding out effects on domestic economy, growth is accumulated both in the upstream as well as in the down stream businesses (Robinson, 2006). The activities of MNCs reduces a country’s propensity to import and leads to increased competition in the host countries which promote efficient allocation of production resources.
All these notwithstanding domestic benefits from multinational investment are antigen on government capacity, democratic accountabilities, political stability, economic stability, regulation standardization and development policies that maximizes freedom of production and consumption in the host country. It is however instructive to find out whether these supportive incentives are available in Nigeria and whether the existence of multinational corporations has actually contributed positively to the growth and development of the country.
Nigeria’s economic aspirations have remained that of altering the structure of production and consumption patterns, diversifying the economic base and reducing dependence on oil, with the aim of putting the economy on a part of sustainable, all-inclusive and non-inflationary growth (Onimode,1999). The implication of this is that while rapid growth in output, as measured by the real gross domestic product (GDP), is important, the transformation of the various sectors of the economy is even more critical. This is consistent with the growth aspirations of most developing countries, as the structure of the economy is expected to change as growth progresses.
Argyrous (2004), reports that every nation strives for growth and development. Economic progress is merely a component of development but development goes beyond pure economics. In an ultimate sense, development must encompass more than the material and financial side of people’s lives. Edward (1998) opines that development is, therefore, a multidimensional process involving the reorganization and reorientation of the entire economic and social systems. In addition to improvements in incomes and output, it typically involves radical changes in institutional, social and administrative structures, as well as in popular attitudes and in many cases even customs and beliefs.
| Project details | Contents |
|---|---|
| Number of Pages | 104 pages |
| Chapter one | Introduction |
| Chapter two | Literature review |
| Chapter three | methodology |
| Chapter four | Data analysis |
| Chapter five | Summary,discussion & recommendations |
| Reference | Reference |
| Questionnaire | Questionnaire |
| Appendix | Appendix |
| Chapter summary | 1 to 5 chapters |
| Available document | PDF and MS-word format |
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