Keep in mind, reduced interest rates help larger firms more often than smaller firms because the larger businesses are more capable of raising their share. Also, firms with a high ration of capital costs to labor costs will benefit more from investment grants than multinationals with a lower capital to labor cost ratio. Companies with a high degree of vertical integration will be easier to attract than those who depend on sub-contracting for some services or depend of other companies for material. Companies in the latter situation will be reluctant to commit themselves to an area that is less developed and where supplies or services that they need may not be available. Related to a company's degree of vertical integration is its decision-making structure.
Many companies have decision-making procedures that involve high levels of management.
In this case, communication capabilities between the less developed country and the parent country of the firm are very important. When dealing with multinational enterprises it may be simpler for local government officials to deal with firms that have a decentralized decision-making structure so that their can be more actual contact between the local government and decision makers. Dealing with the larger multinational has advantages and disadvantages. While this is a disadvantage to countries in the competition, government officials should keep in mind that larger enterprises can actually be more flexible in several ways. First, large companies can often adjust production techniques and company structure to fit local situations.