The correct option is 2 and 3 only.
Explanation
Multinational Corporations (MNCs) are enterprises that manage production or deliver services in more than one country. Their operational model relies on the globalization of production, where the production process is integrated across national borders to optimize costs and efficiency.
Statement 1 is Incorrect:
By definition, an MNC must own or control production assets in at least one country other than its home country. A company that produces goods entirely within a single home country and only markets them globally is classified as an exporter, not a multinational corporation in the context of production.
Statement 2 is Correct:
MNCs typically divide the production process into smaller, distinct parts and disperse them globally. This is known as the fragmentation of production or Global Value Chains (GVCs). For instance, a company may design a product in the U.S., manufacture components in China, assemble them in Mexico, and provide customer support from India. This strategy allows firms to leverage specific local advantages.
Statement 3 is Correct:
China is a major hub in global production networks, often referred to as the "factory of the world." MNCs prefer China for manufacturing primarily due to the comparative advantage of low production costs, including cheap labor and raw materials, alongside robust infrastructure.
Key Takeaway:
The defining feature of MNCs is the dispersal of production across different countries to exploit cost arbitrages (such as low labor costs) and maximize global efficiency, rather than concentrating production in a single location.