Directions (46-53) : Read the following passage and answer the given questions. Certain words/phrases have been given in bold to help you locate them while answering some of the questions. Though global multinationals account for only 2% of the world's jobs, they own or orchestrate the supply chains that account for over 50% of world trade, they make up 40% of the value of the West's stock markets; and they own most of the world intellectual property. Although the idea of being at the top of the food chain makes these companies sound all-conquering, rickety and overextended are often more fitting adjectives. Companies became obsessed with internationalizing their customers, production, capital and management. In 2016 multinationals cross-border investment fell by 10 15%, the share of trade accounted for by cross-border supply chains has stagnated since 2007 and the proportion of sales that Western firms make outside their home region has shrunk. They are in retreat. To understand why this is, consider the three parties that made the boom possible, investors, the “headquarters countries” in which global firms are domiciled, and the “host countries" that received multinational investment. Each thought that multinational firms would provide superior financial or economic performance. Investors saw a huge potential for economies of scale. As China, India and the Soviet Union Opened up, and as Europe liberalized itself into a single market, firms could sell the same product to more people. Moreover, they saw 'geographical arbitrage' is. from the rich world they could get management. capital, brands and technology and from the emerging world they could get cheap workers and raw materials as well as lighter rules on pollution. These advantages led investors to think global firms would grow faster and make higher. profits. That was true for a while, not today. The profits of the top 700-odd multinational firms have dropped by 25% over the past five years, according to FTSE, an index 'firm. The weakness of many currencies against the dollar is part of the story; the stump in commodity prices, and thus the profits of oil firms, mining firms and the like is a factor too. Another 10% of deterioration is due to the collapse of banks. Individual bosses will often blame one off factors, currency moves, the economic collapse of Venezuela, currency swaps and the like can be thought of, a depression in Europe, a crackdown on graft in China and so on. But the deeper explanation is that both the advantages of scale and those of arbitrage have worn away. As a result, firms with a domestic focus are winning market share by 2%. In Brazil, two local banks have trounced global lenders. What about the “headquarters countries” ? In the 1990s and 2000s they wanted their national champions to go global in order to become bigger and brainier. The mood changed after the financial crisis. Multinational firms started to be seen as agent of inequality. They created jobs abroad, but not at home. As a result, the tapestry of rules designed to help business globally is fraying. Takeovers of Western firms now often come With strings attached by governments to safeguard local jobs and plants. There are gathering clouds in host Countries as well. China has been turning the screws on foreign firms in a push for “Indigenous innovation”. Bosses say that more Products have to be sourced locally and intellectual property Often ends up handed over to local partners. Strategic industries, including the internet, are out of bounds to foreign investment. Many fear that China's approach will be mimicked around the developing world, forcing multinational firms to invest more locally and create more jobs-a mirror image of the pressure placed on them at home.
Which of the following can be said about the multinationals in the context of the passage ?
A. Investors in multinational firms may stop investing.
B. There is resistance to multinational firms in their own domestic markets.
C. Multinationals are struggling.
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