What Are The Effects Of Foreign Competition On The Host Countries?

There are different effects of the foreign competition. The foreign invest is useful for the country and it helps the host countries to give boost the economic activities of the country. But it is another fact that the foreign companies also bring tough competition to the host countries because they are technologically, financially stronger and have skilled human resource so this lead to the competition in the host countries and the national companies are subject to survive against the multinational companies.

It is the part of the large multinational companies the multinational companies may be able to draw funds from the host country which are invested their at the time of starting business in the host country. This could drive indigenous companies out of business and allow the firms to monopolize the market. One the market was monopolized by the foreign multinational companies which can later misuse their powers by raising the prices of product in the market to seek higher profits.


This practice is higher in those countries where there are few big companies of their own in the country. While the trend is very limited in the countries which are technologically advance nations. However this is very rare happened in the countries because most of the countries keep watch on foreign companies.

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