The Impact of Multinational Corporations on Mexico

Latin America has seven big economies Brazil, Mexico, Argentina, Venezuela, Colombia, Chile and Peru. The largest economy can be shown as Brazil. Mexico is the second largest economy in Latin America and expanded at a strong pace for most of 2011 but started to show signs of slowly decelerating. Result to that seems to be multinational firms. The multinational firms set up their factories to Mexico to reduce the cost of production. Although the multinational firms seem to be helping the Mexico economy, they also harm the domestic firms. The question has to be asked that how does production of manufacturing goods & services by domestic or multinational affect a country’s economy?

First of all, we have to mention about the Mexico’s economy briefly. Mexico locates in the Central America and has GDP over one trillion. Some of the countries locate in Central America as well as Mexico, are Guatemala, Panama, El Salvador, Honduras, Nicaragua and Belize. These countries are very poor in GDP and very low income compared to Mexico. Mexico also has a higher income level refer to the GDP per capita. Mexico’s GDP growth over the last year is 4%. What is GDP and why is it so important for a country? GDP represents the output of all final goods& services produced in an economy during a year. It is important because it reflects the situation of economy by all final goods& services produced in an economy so that the governments can foresee the economic situation of a country. There is also another variable that can show economic evaluations which is GNI. According to World Bank, Mexico’s GNI is also over one billion however since their population is high, GNI per capita is less compared to the other Latin American Countries. GNI per capita i...

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...m competition by the Mexican government through tariffs are no longer protected. Because a very large percentage of Mexican manufacturers are small with fewer than 250 workers, some of them have not been able to withstand the pressures of competing in an international marketplace. However, the increase in manufacturing output over the past 5 years suggests that the surviving manufacturers are doing well.

Works Cited

• Retrieved data on 5 May, from www.worldbank.org

• Retrieved data on 5 May, from http://www.nationsencyclopedia.com/economies/Americas/Mexico-OVERVIEW-OF-ECONOMY.html

• Retrieved data on 6 May, from http://geo-mexico.com/?tag=trade

• Retrieved data on 9 May, from http://www.iie.com/publications/chapters_preview/332/06iie3349.pdf

• Retrieved data on 9 May, from http://www.nationsencyclopedia.com/economies/Americas/Mexico.html#ixzz2TF51a352