1 / 5

The Dual Impact of Multinational Enterprises on Globalization and Host Economies

Multinational Enterprises (MNEs) serve as a primary driver of globalization, largely through Foreign Direct Investment (FDI) and international trade. While their presence can lead to immediate capital inflows and job creation in host countries, there are significant drawbacks including disruption of local businesses and potential job loss in home countries. MNEs often face scrutiny from anti-globalization movements due to their influence on environments, labor standards, and political structures. Understanding their multifaceted impact is essential for developing balanced government policies.

rod
Télécharger la présentation

The Dual Impact of Multinational Enterprises on Globalization and Host Economies

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. MNE and Government Policy Chapter11

  2. Multinational Enterprises • Main engine of globalization • Mainly FDI • Exports and imports • Technology transfer • Some have sales larger than many nations’ GNPs • Main target of anti-globalization movements.

  3. Effects of FDI and MNE • Balance of payments effect • Capital inflow to host country  Positive effect on B/P for host country initially • Demand for home country equipments and related products and earning repatriation  Negative effect on B/P for host country later • Home countries may impose capital outflow restrictions. • Host countries may impose repatriation restrictions, asset valuation controls.

  4. Effects of FDI and MNE • Growth and Employment Effect • Positive effect on host country: additional job creation and more efficient use of resources • Negative effect on host country: suppression of local enterprises and entrepreneurs • Home country’s labor claims that their jobs are taken by host country’s workers. • Desirable FDI for host country: highly differentiated product and possession of scarce resources

  5. Effects of FDI and MNE • Political Concerns • Foreign policy instrument of home governments Extraterritoriality (Home governments apply their laws to MNEs in host countries) • Concern over control of sensitive sectors of host countries • Self-interest seeking powerful economic animals with no consideration of their impacts on environments, labor, societies and culture. • Causing government corruptions (lobbying, bribery)

More Related