MNCs Have Been Praised by Some and Condemned by Others

question 19

Essay

MNCs have been praised by some and condemned by others. What are the pros and cons of MNCs in the Global South? On the whole, has their presence there produced positive or negative effects?

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Definitions:

Diversifiable Risk

Nonmarket or firm-specific risk factors that can be eliminated by diversification. Also called unique risk, firm-specific risk, or nonsystematic risk. Nondiversifiable risk refers to systematic or market risk.

Market Risk

Also known as systemic risk, it's the potential for investors to experience losses due to factors that affect the overall performance of the financial markets.

Unique Risk

Referred to as unsystematic risk, it denotes the risk linked to a particular company or sector.

Firm-specific Risk

Risk associated with an individual company, as opposed to the market as a whole.