How do multinational corporations contribute to the globalisation of the world economy?

Globalisation refers to the integration of markets within the world economy, which consequently increases the interconnectedness of national economies. Multinational corporations are a function of this interconnectedness, as they can form and utilise the connections between national economies, to operate within multiple countries. The operation of a multinational corporation within these countries will require significant investments, often called foreign direct investment, which will act as an injection into the host economy. With the operation of multiple multinational corporations in one nation, each investing in the region, for example, Maharashtra in India which receives significant foreign direct investment, the economy will be boosted, given that investment is a primary component of the aggregate demand of a nation. These global financial flows between economies epitomise the interconnectedness and thus globalisation of the world economy. The production of goods in one nation, and the sale of those goods to another nation also epitomises the increasing interconnectedness of economies that can be achieved through the operation of multinational corporations. Additionally, multinational corporations may also outsource their production processes, often to lesser developed nations to reduce costs. This means that economies must remain highly interconnected in order to smoothly import and export goods produced between different stages of the production line, which often operates across multiple countries. This represents the flows of physical goods between economies, such as raw materials, energy, food, parts and consumption goods. Flows of information are also vital in connecting economies, as the effective communication between operating centres in different nations is a prerequisite for a successful multinational corporation. Such flows combine to form a global economic network, which is comprised of multiple national economies.