Title

Local-level analysis of Multinational Corporations in Less Developed Countries

Presenter Information

Danait Tafere

Document Type

Oral Presentation

Start Date

16-5-2013

Abstract

Since the 1980s a new wave of globalization has caused dramatic increase in foreign investments in less developed countries (LDC), restructuring their international trade relations. In this context, social scientists have asked about the effects of international economic relationships on social and economic development in LDCs. Most of the previous research on this question focused on national levels of foreign direct investment (FDI), or the (national) level of concentration of FDI, or trade dependence. Researchers in the dependency theory tradition argued that poor countries with a highly concentrated FDI generate a pattern of dependency. High investment concentration by a single or a small number of investing countries limits the autonomy of state and business elites to act in the long term interest of domestic growth in the host country. Similarly, dependency theorists have found that dominance of foreign capital allowed the investing country to obtain and maintain a significant advantage over its dependent partner. Other subset of studies in that tradition focuses on the relationship between economic dependence and food security. One recent study argues that the effects of FDI on food security depend on how FDI is distributed among economic sectors (primary manufacturing, service). The existing research on this topic has not, however, given enough attention to the physical presence of multinational corporations (MNCs) as a distinct form of international economic relationship. If we turn our attention to the physical presence of MNC facilities, then we have these new questions concerning local-level effects of the presence of foreign capital in LDCs. My research takes up questions regarding the relationship between the physical presences of multi-national corporations (MNCs) in Africa and local level effects on development policies and human capital, with a local level analysis. I will be using local level data from African countries found in the sources cited below. I will be looking at the presence of MNCs in 10 African countries and selecting three to five districts from each country where there are MNCs located and then picking comparison three to five districts that are from each country that do not have MNCs. This research should gives us a clear understanding about the effects and outcomes on the physical presence of MNCs in LDCs at the local level.

Faculty Mentor(s)

Michael Mulcahy

Additional Mentoring Department

Sociology

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May 16th, 8:00 AM

Local-level analysis of Multinational Corporations in Less Developed Countries

Since the 1980s a new wave of globalization has caused dramatic increase in foreign investments in less developed countries (LDC), restructuring their international trade relations. In this context, social scientists have asked about the effects of international economic relationships on social and economic development in LDCs. Most of the previous research on this question focused on national levels of foreign direct investment (FDI), or the (national) level of concentration of FDI, or trade dependence. Researchers in the dependency theory tradition argued that poor countries with a highly concentrated FDI generate a pattern of dependency. High investment concentration by a single or a small number of investing countries limits the autonomy of state and business elites to act in the long term interest of domestic growth in the host country. Similarly, dependency theorists have found that dominance of foreign capital allowed the investing country to obtain and maintain a significant advantage over its dependent partner. Other subset of studies in that tradition focuses on the relationship between economic dependence and food security. One recent study argues that the effects of FDI on food security depend on how FDI is distributed among economic sectors (primary manufacturing, service). The existing research on this topic has not, however, given enough attention to the physical presence of multinational corporations (MNCs) as a distinct form of international economic relationship. If we turn our attention to the physical presence of MNC facilities, then we have these new questions concerning local-level effects of the presence of foreign capital in LDCs. My research takes up questions regarding the relationship between the physical presences of multi-national corporations (MNCs) in Africa and local level effects on development policies and human capital, with a local level analysis. I will be using local level data from African countries found in the sources cited below. I will be looking at the presence of MNCs in 10 African countries and selecting three to five districts from each country where there are MNCs located and then picking comparison three to five districts that are from each country that do not have MNCs. This research should gives us a clear understanding about the effects and outcomes on the physical presence of MNCs in LDCs at the local level.