Until the end of World War I, there were practically no transnational corporations (companies from a certain country operating in another), with the exception of a few North American corporations. After the conflict, around 1950, many companies expanded their areas of operation, establishing themselves in different countries around the globe.
With the dispersion of large companies around the world, Latin America was the target of many business corporations, becoming economically influenced by these companies in a significant way.
The transnationals that have installed themselves in Latin American countries are mainly of North American, Japanese and European origin. These companies wanted to take advantage of the favorable conditions that the Latin countries offered, such as:
• Plenty of low-cost labor compared to salaries paid in developed countries.
• Wealth in raw materials (water, minerals, energy, agriculture, among others).
• Potential consumer market, that is, populations that could consume the companies' products.
• Infrastructure promoted by the government of the country where the company is located.
• Soft environmental laws.
• Tax incentives, such as partial or full tax exemption.
• Permission to send profits to your home country.
These and other benefits facilitated the spread of transnational corporations throughout the world. Today, most of these companies dominate the automotive, food, steel, metallurgy, electronics, pharmaceutical, chemical and agribusiness segments.
Thus, we can say that these companies played an essential role in the industrialization of Latin countries. However, the predominance of transnational corporations was negative because it inhibited the emergence of national companies.
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By Eduardo de Freitas
Graduated in Geography
Brazil School Team
America - continents -geography - Brazil School
Would you like to reference this text in a school or academic work? Look:
FREITAS, Eduardo de. "Transnationals in Latin America"; Brazil School. Available in: https://brasilescola.uol.com.br/geografia/as-transnacionais-na-america-latina.htm. Accessed on June 28, 2021.
