multinational corporation

A multinational firm is defined as a transnational and multinational enterprise that engages in foreign direct investment and owns or controls value-added activities in more than one country (Dunning &Lundan 2008:3). Most of their activities are carried out abroad and are involved in a large market and have intermediate products for efficiency. Transnational corporations have a comparative edge in international trading.

The challenges that international corporations face and how to overcome them.

Significant foreign debt. Debt accumulated by foreign countries has an impact on product exportation and importation in international trade. Exchange instability as a result of political instability have caused the currency of various countries to depreciate and thereby inhibits trade

Foreign government entry requirement which makes it difficult for business to be carried out this is in particular through external tariffs which make the trade very expensive to conduct.

Corruption some of the officers in the boundaries require bribe for them to allow trade of goods across the border and it makes some of the funds which were supposed to be used in trade to be handed to wrong people. It comes as a result of having no set strict rules and agreement among countries on the passage of products across the border.

High cost of products and communication because the joint venture must study the foreign market, different culture, the best preferences for the trade and report for international taste so that they may be effective economically, socially and, politically

Creation of an environment that favor the development of company such as an increase in the volume of sales, penetrating to the competitors market thereby eliminating competition. Also, increase on comparative advantage will reduce these challenges.

2.Security and exchange commission is an agency of the government of U.S which oversees transactions involving securities, financial professions activities and fund trading to reduce fraud and deception .it has five commissioners who serve for five-term only, and the agents don't belong to the same political party. The commission contains four main categories that are the division of corporation finance which enhances flow and disclosure of relevant information needful to various users. There is also the classification of trading and market which facilitates equity and efficient market, then investment management which fosters protection of investors and capital formation through efficient management. The department of enforcement which is mandated with investigating law violation and analyses criminal activities

How the SEC affects the economy

It has increased accountability and transparency in the stock exchange market which is the biggest stock market in the world. This has attracted many financial institutions example investment banks and legal firms

It has also facilitated the companies to go public after they grow .it has also led the faster growth of the lowly developed market.

Constraints put by SEC

SEC eases confidence in the US stock exchange market which promotes stronger functioning of the economy. This is possible through transparency in the functionality of the business organization thereby investors can access accurate information on the gain the company is anticipating.

Through this analysis, the fair price of the stock is established and prevents vulnerable sudden shifts. The commission has also assured confidence in the stock market through prosecuting criminals, for example, insider trading and Enron, selling of bonds and stocks without the correct registration and reduces manipulation of the forex trading market.


1. Amadeo Kimberly, (2016) the balance us securities and exchange commission

2. Sidney, Rolfe. (1970), The Multinational Corporation, Foreign Policy Association, New York

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