Jasz
VIP Contributor
Multinational corporations (MNCs) are generally perceived as being good for the world economy. They are also seen as doing more harm than good. They account for about half of world trade in goods and services, and most countries have at least one MNC operating within its borders. In some cases, such as India or China, MNCs are among the largest employers of labor in their countries (though not necessarily their largest export firms). In other cases, such as France or Germany, MNCs are closely integrated into local economies through cross-border mergers and acquisitions (M&As).
The conventional wisdom is that MNCs have a positive effect on economic growth, employment and poverty reduction. However, there is no doubt that they can have negative impacts on local economies and communities because of their power to set prices and wages, or to move production to lower-cost locations.
In recent years, however, there has been an increasing debate about whether this beneficial image of multinationals is justified. Is it really true that the benefits outweigh the costs?
The conventional wisdom is that MNCs have a positive effect on economic growth, employment and poverty reduction. However, there is no doubt that they can have negative impacts on local economies and communities because of their power to set prices and wages, or to move production to lower-cost locations.
In recent years, however, there has been an increasing debate about whether this beneficial image of multinationals is justified. Is it really true that the benefits outweigh the costs?
