The impact of multinational corporations on a developing country: a trade off in the long run?

Mariam Khawar

The Journal of International Trade & Economic Development, 1997, vol. 6, issue 1, 101-112

Abstract: This paper investigates the 'long-run' effects of multinational firms on unemployment and welfare of the host country. Our findings indicate that a trade off between unemployment reduction and national welfare exists for the host country which is contrary to the view that foreign investment via multinational firms is immiserizing in the 'short run'. This may also help explain the continuing efforts on the part of LDC governments to attract foreign investment. Furthermore, in the absence of a subsidy, increased investment by multinational firms does not have any adverse effect on the welfare of the host country, while still reducing unemployment.

Keywords: Foreign direct investment; developing countries economic welfare (search for similar items in EconPapers)
Date: 1997
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DOI: 10.1080/09638199700000007

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