Multinational corporations’ operations and growth of local firms in Tanzania

Abstract

The main purpose of this study was to examine the effect of multinational corporations operations on the growth of local firms in Tanzania. The study specifically aimed at analysing how the MNCs operations in the country affect the growth of local firms in Tanzania. The literature review was conducted through theory and various studies by different scholars, on how the actions of MNCs affect local firms especially on developing countries. Qualitative approach was used because it helped to get an in-depth understanding of the problem and come out with concrete solutions and recommendations. The findings were analysed through content analysis and results showed that actions by MNCs has direct effect to local firms, as they contributed on small growth to local firms. Acquisition of local firms, advanced distribution channels, advanced marketing strategies, pricing, financial power comes from tax holidays, make MNCs to prosper while it causes slow growth of local firms. Therefore, the study recommends that government should create conducive business environment for local firms in which they can compete with MNCs. Government has to support local firms for growth, by ensuring a health competition between local firms and multinational companies, government has to favour local firms in tax, to have tax holiday as enjoyed by multinational companies.