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State three reasons why multinational firms are re-locating to countries like Vietnam, Indonesia and Thailand in Southeast Asia - Leaving Cert Economics - Question 7 - 2010
Question 7
State three reasons why multinational firms are re-locating to countries like Vietnam, Indonesia and Thailand in Southeast Asia. (i) (ii) (iii)
Worked Solution & Example Answer:State three reasons why multinational firms are re-locating to countries like Vietnam, Indonesia and Thailand in Southeast Asia - Leaving Cert Economics - Question 7 - 2010
Step 1
(i) Lower wage costs
Answer
One significant reason multinational firms are relocating is due to lower wage costs in countries like Vietnam, Indonesia, and Thailand. Firms can benefit from reduced labor expenses, allowing them to maintain or increase profit margins while remaining competitive.
Step 2
Step 3
(iii) Less restrictive regulatory framework
Answer
Lastly, the less restrictive regulatory framework in these nations makes it more appealing for firms to operate there. Lighter regulations can result in easier market entry and operational freedom, as companies may face fewer restrictions, especially concerning environmental protection and business operations.