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What are the formal and informal sectors?Why do transnational corporations locate in LEDCs?What are the advantages and disadvantages for the host country?
What are the formal and informal sectors?Why do transnational corporations locate in LEDCs?What are the advantages and disadvantages for the host country?
Transnational companies have the power to choose where to locate their factories. They are attracted to LEDCs due to the large pool of labour, low wages and taxes and fewer restrictions.
A transnational company has factories and offices in several countries. Therefore it is a global company in that it operates across national boundaries.
Transnational corporations in LEDCs
The headquarters of a transnational company is usually in an MEDC with branch factories worldwide.
What are the formal and informal sectors?Why do transnational corporations locate in LEDCs?What are the advantages and disadvantages for the host country?
Complete the table. Why is this company described as a transnational company (TNC)?Use examples to examine the advantages and disadvantages that TNCs bring to LEDCs.
The informal sector of employment is created by people finding work for themselves. This is usually due to the rapid growth of LEDC cities. Some examples of jobs are scrap collectors, street entertainers and shoeshiners.
The formal sector of employment is controlled by the government and large companies. Some examples of formal jobs are factory workers, shop assistants and nurses.
A transnational company (TNC) is a global company in that it operates across national boundaries. They are attracted to the large pool of labour, low wages, taxes and fewer restrictions of LEDCs.
TNCs bring economic, social and environmental advantages and disadvantages to the host countries.