Final answer:
The CFO's decision to build a production site abroad is influenced by comprehensive factors such as labor and capital costs, supplier and customer proximity, and local infrastructure quality. Environmental regulation costs are minimal compared to other considerations. Multinational corporations contribute significantly to local economies by offering higher wages and benefits, and investing in essential infrastructure.
The correct option is a.
Step-by-step explanation:
Analyzing the Impact of Multinational Corporations
When discussing the Chief Financial Officer of a transnational company planning to build a new production site abroad, it is important to consider the myriad of factors that influence such a decision. These factors include the cost of labor, the availability of financial capital, proximity to reliable suppliers and customers, the quality of the local infrastructure such as transportation,
communications, and electrical power networks, the level of taxes, and the local government's competence and honesty. Additionally, the cost of environmental regulations is also a factor, but it is generally a minor expense compared to the aggregate costs faced by a large industrial plant.
Multinational corporations often affect the economies and societies of developing nations, providing higher wages and better benefits compared to local businesses. Moreover, while some may assume that companies might engage in a 'race-to-the-bottom' by moving production to countries with weaker environmental laws to save costs, this is not the dominant trend.
The overall financial incentive to exploit weaker environmental regulations is not strong since environmental costs are relatively low compared to other factors that are more critical in the decision-making process of these corporations.
In the context of globalization and international finance, successful development in developing nations involves not just redirecting labor and capital, but also developing economic infrastructure.
This requires significant saving levels and investment, often facilitated by multinational corporations that bring capital, technology, and expertise to these emerging markets.
The correct option is a.