To continue with, by getting into a group of more “technologically developed” countries and companies, firms can benefit in improving their production. More specifically, by integrating with larger companies, firms incorporate better technological equipment. As a result, firms can produce more efficiently and hence, enhance their profits.

At this point it would be useful to mention the phenomenon of “government subsidizing”. When a government notices a decrease in the country’s GDP (i.e. deficit) due to great import of products, which is expensive and in some cases time consuming, it aims to increase the domestic production. By subsidizing small firms, companies/firms will result in greater production and will therefore commence exporting. In that way, companies will become increase their popularity and eventually become multinational.

However, it is of great importance for firms to obey to specific criteria in order for them to be in fact considered “multinational”.

It is true, that the improvement of technological equipment, transportation of products and development of production processes and communications play a great role in the consideration of a company as “multinational”.

Neil H. Jacoby proposes that a multinational corporation evolves from six stages. The first stage is exporting its products to foreign countries.