Transnational Corporations: Choice of Techniques and Employment in Developing Countries

V. N. Balasubramanyam

Chapter 32 in Human Resources, Employment and Development, 1983, pp 527-546 from Palgrave Macmillan

Abstract: Abstract In the developing countries, employment has grown much less rapidly than output in the manufacturing sector, despite the prevalence of underemployment in urban as well as rural areas. It is frequently suggested that this is because manufacturing enterprises there have adopted technologies inappropriate to the local factor endowments. A stormy debate on the choice of technologies has ensued, with transnational corporations at the centre of the storm. To their critics, the transnationals are the major cause of the adoption of inappropriate technologies, thus foreclosing rather than creating employment opportunities. To their supporters, transnational corporations are the major conduit of modern technologies to developing countries, and their choice of techniques merely reflects the response of efficient firms to the relative costs of labour, capital and other inputs. The debate has produced a highly controversial literature with the disputants often taking extreme positions. This paper reviews the arguments in the light of available facts and empirical evidence.

Keywords: Foreign Investment; Foreign Firm; Factor Proportion; Factor Price; Transnational Corporation (search for similar items in EconPapers)
Date: 1983
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Persistent link: https://EconPapers.repec.org/RePEc:pal:intecp:978-1-349-22741-9_32

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DOI: 10.1007/978-1-349-22741-9_32

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