In general, crowding out might take place due to two reasons: 1) when domestic firms disappear because of higher efficiency and better product quality of foreign subsidiaries, and 2) when they are wiped out because these foreign affiliates have better access to financial resources and/or engage in anticompetitive practices. In the first case, the net impact on welfare is positive as firms with higher efficiency and better product quality contribute to the economic development of the host country. But in the second case, there is welfare loss and governments intervene through different channels in order to help the local firms. For example, they might establish or subsidize financing for domestic small and medium firms (Bhalla and Ramu, 2005).
The overuse of these sites on a daily basis has many negative effects on the physical and mental health of students making them lethargic and unmotivated to create contact with the people in person. The parents should check and balance on their children when they use the internet. They should be on guard whether they are using it for appropriate time period or not. The peers and teachers should also help students make them aware of the negative effects and explain what they are losing in the real world by sticking to these social networking sites.