Role of Multinational Corporations in Shaping Foreign Policy in Host Countries

Purpose: The aim of the study was to assess the role of multinational corporations in shaping foreign policy in host countries. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: The study found that Multinational corporations (MNCs) significantly influence the foreign policy of host countries through economic power, investment strategies, and lobbying efforts. Their substantial financial resources allow MNCs to invest in local economies, which can lead to job creation and infrastructure development, making them vital players in the host nation's economic landscape. Consequently, governments may prioritize policies that favor MNC interests to attract and retain foreign investment. Furthermore, MNCs often engage in lobbying activities to shape legislation and regulations that align with their operational needs, thus directly impacting foreign policy decisions. This dynamic relationship can lead to a symbiotic interaction where both MNCs and host countries leverage each other for mutual benefit, although it may also raise concerns regarding sovereignty and the potential for MNCs to exert undue influence on national policies. Implications to Theory, Practice and Policy: Dependency theory, globalization theory and institutional theory may be used to anchor future studies on role of multinational corporations in shaping foreign policy in host countries. From a practical perspective, the recommendations advocate for actionable steps that host countries can take to balance the influence of MNCs in shaping foreign policy. In terms of policy contributions, the recommendations advocate for comprehensive frameworks that prioritize public welfare and environmental sustainability in regulatory practices.