Globalization of financial markets

Went (2000) states: “They could obtain lower tax rates – ‘or else we’ll move abroad’ – more subsidies – ‘or else we’ll move abroad’ – lower direct and indirect wage costs for the same or more work – ‘or else we’ll move abroad’ – less say by unions or government in what happened in the company – ‘or else we’ll move abroad’…” (p93). All this contributed to the rapid increase in profits for the MNCs. This is because all MNCs are interested in are materials, delivery dates, designs, and low prices, paying no attention to how low the prices are, the workers, or the working conditions. In addition to making it easier for MNCs to put governments and countries under pressure, the globalization of financial markets has also made it effortless for MNCs to search around the world for places where they could find work and receive the highest possible returns. In other words, to increase growth and profit, MNCs look for countries where materials and labour where cheaper.

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