The correct option is 2 and 3 only.
Explanation
A Multinational Corporation (MNC) is an enterprise that manages production or delivers services in more than one country. The defining characteristic of an MNC is the ownership or control of production assets outside its home country, distinguishing it from companies that merely engage in international trade.
Statement 1 is Incorrect:
An MNC is defined as a company that owns or controls production in more than one nation. Merely exporting finished goods to other nations constitutes international trade, but it does not classify a company as a Multinational Corporation. To be an MNC, the entity must have physical operations (factories, offices, or assets) in at least one other country.
Statement 2 is Correct:
MNCs frequently set up production jointly with local companies (Joint Ventures). This strategy benefits the MNC by providing immediate access to the local company's existing marketing networks and established customer base. It also helps the MNC navigate local regulations and cultural nuances. Conversely, the local company benefits from the MNC's advanced technology, management expertise, and capital.
Statement 3 is Correct:
The most common route for MNC investments is to buy up local companies and then expand production (Mergers and Acquisitions). This approach is preferred over "greenfield investments" (building new factories from scratch) because it is faster, eliminates a potential competitor, and provides immediate access to established assets and market share. A classic example in the Indian context is the acquisition of Parakh Foods by the American MNC Cargill.
Key Takeaway:
The primary distinction of an MNC is the control of production across borders, not just the export of goods. Mergers and acquisitions (buying local firms) remain the dominant strategy for MNC expansion due to speed and strategic advantage.