`The economic power and ability of any State has been reduced by the rise of the multinational firm.

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Multinational Firms and the Nation State

Introduction

A multinational firm is any business that is registered and has its operations in more than one nation . Despite the fact that a multinational has operations in more than one country , its headquarters is usually in one country . Multinational firms either manage production or deliver services in more than a single nation . The country where the firm has its headquarters is referred to as the home country , while the countries where it carries

out its operations are the host countries (Shah 2002 . The well known pioneer multinational firm is the Dutch East India Company . Currently , there are very many firms with offices branches and factories in many nations away from their home countries In fact this is has become one of the major features in this globalisation era . Some of the firms are very big . Some of them have a budget that is higher than the national GDP of their host country (Pitelis and Sugden 2000 . These companies have grown to have strong economic power in their host states as well as in the global economy Multinational firms have become very powerful in international relations as well as globalisation . The presence of such strong players in the global economy has become a controversial . This seeks to prove the fact that the economic power and ability of nation states has been reduced by the rise of the multinational firm (Shah 2002 . The will tackle this...