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| What are criticisms of multinational corporations operating in developing countries - Research Paper Example

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First, it is mostly argued that multinationals can obstruct the economic growth and development of the developing countries by taking local capital rather than providing new capital such as conducting…
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| What are criticisms of multinational corporations operating in developing countries
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| What are criticisms of multinational corporations operating in developing countries

For example, the improper use of baby milk formula by Nestle in some developing countries raised the question of low quality production. These profits are usually repatriated instead of reinvested locally that can cause hindrance in host country’s growth. The multinationals are also seen to diminish the competition in the developing countries. Besides this, multinational corporations are also seen to intervene in developing countries’ political processes in order to further their corporate interests. For instance, many MNCs have been alleged in the involvement of overpowering the Chile’s President Allende. For this, they can use their resources in legal or illegal activities. In this sense, multinationals are not different from local corporations but still have different characteristics that are basis for criticisms.
Multinationals corporations can help in improving the structure of the economy by bringing in foreign direct investments which is a much needed resource in developing countries. Technology is brought in the host country because the existing technology might not be efficient for production. In this way, developing countries can have access to better and efficient technologies. Besides economic gains, multinationals can also have a positive impact on the welfare of developing countries. Jobs would increase boosting national economy and resident income. Increase in income will lead to increase in tax bases and increased government expenditure. For example, investment of information technology in India has led to increased income of residents and increased capital expenditures. Positive impacts of MNCs can help developing countries rise in the ... Read More
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