IDEAS home Printed from https://ideas.repec.org/a/bla/rdevec/v14y2010i1p93-102.html
   My bibliography  Save this article

Equity Control of Multinational Firms: Effects on Resource Allocation and National Welfare

Author

Listed:
  • Hamid Beladi
  • Shigemi Yabuuchi

Abstract

In this paper, we re‐examine the effects of equity control of multinational firms on resource allocation and national welfare in a model with rural–urban migration and urban unemployment. A large number of recipient (host) countries are developing countries with dual economies. We indicate, among other things, that a restriction on multinational investment may lower the unemployment rate and increase the total employment in the host country. Furthermore, we find that the restriction on multinational investment raises the national welfare in the host economy if the tariff imposed on imports is sufficiently large and the difference between domestic and foreign capital rental is sufficiently small.

Suggested Citation

  • Hamid Beladi & Shigemi Yabuuchi, 2010. "Equity Control of Multinational Firms: Effects on Resource Allocation and National Welfare," Review of Development Economics, Wiley Blackwell, vol. 14(1), pages 93-102, February.
    • Handle: RePEc:bla:rdevec:v:14:y:2010:i:1:p:93-102
    DOI: 10.1111/j.1467-9361.2009.00541.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1467-9361.2009.00541.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1467-9361.2009.00541.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Bhagwati, Jagdish N & Srinivasan, T N, 1974. "On Reanalyzing the Harris-Todaro Model: Policy Rankings in the Case of Sector-Specific Sticky Wages," American Economic Review, American Economic Association, vol. 64(3), pages 502-508, June.
    2. Hill, John K & Mendez, Jose A, 1992. "Equity Control of Multinational Firms by Less Developed Countries: A General Equilibrium Analysis," The Manchester School of Economic & Social Studies, University of Manchester, vol. 60(1), pages 53-63, March.
    3. Chi‐Chur Chao & Eden S. H. Yu, 2006. "Partial Privatization, Foreign Competition, and Optimum Tariff," Review of International Economics, Wiley Blackwell, vol. 14(1), pages 87-92, February.
    4. repec:bla:econom:v:48:y:1981:i:191:p:219-34 is not listed on IDEAS
    5. Yabuuchi, Shigemi, 1993. "Urban unemployment, international capital mobility and development policy," Journal of Development Economics, Elsevier, vol. 41(2), pages 399-403, August.
    6. Khan, M. Ali, 1982. "Tariffs, foreign capital and immiserizing growth with urban unemployment and specific factors of production," Journal of Development Economics, Elsevier, vol. 10(2), pages 245-256, April.
    7. Chao, Chi-Chur & Yu, Eden S.H., 2007. "Trade liberalization, foreign ownership, and the environment in a small open economy," International Review of Economics & Finance, Elsevier, vol. 16(4), pages 471-477.
    8. Hamid Beladi & Chi‐Chur Chao, 2006. "Mixed Ownership, Unemployment, and Welfare for a Developing Economy," Review of Development Economics, Wiley Blackwell, vol. 10(4), pages 604-611, November.
    9. Hamid Beladi & Sugata Marjit, 1992. "Foreign Capital and Protectionism," Canadian Journal of Economics, Canadian Economics Association, vol. 25(1), pages 233-238, February.
    10. Yu, Eden S. H. & Chi-Chur, Chao, 1996. "Are wholly foreign-owned enterprises better than joint ventures?," Journal of International Economics, Elsevier, vol. 40(1-2), pages 225-237, February.
    11. Hamada, Koichi, 1974. "An economic analysis of the duty-free zone," Journal of International Economics, Elsevier, vol. 4(3), pages 225-241, August.
    12. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
    13. repec:bla:manchs:v:68:y:2000:i:3:p:321-30 is not listed on IDEAS
    14. Batra, Raveendra N & Ramachandran, Rama, 1980. "Multinational Firms and the Theory of International Trade and Investment," American Economic Review, American Economic Association, vol. 70(3), pages 278-290, June.
    15. Marjit, Sugata & Beladi, Hamid, 2003. "Possibility or impossibility of paradoxes in the small country Harris-Todaro framework: a unifying analysis," Journal of Development Economics, Elsevier, vol. 72(1), pages 379-385, October.
    16. Brecher, Richard A. & Diaz Alejandro, Carlos F., 1977. "Tariffs, foreign capital and immiserizing growth," Journal of International Economics, Elsevier, vol. 7(4), pages 317-322, November.
    17. Gupta, Manash Ranjan, 1995. "Tax on foreign capital income and wage subsidy to the urban sector in the Harris-Todaro model," Journal of Development Economics, Elsevier, vol. 47(2), pages 469-479, August.
    18. Chi‐Chur Chao & Eden S. H. Yu, 2000. "Domestic Equity Controls of Multinational Enterprises," Manchester School, University of Manchester, vol. 68(3), pages 321-330, June.
    19. Hamid Beladi & Sugata Marjit, 1996. "An Analysis of Rural-Urban Migration and Protection," Canadian Journal of Economics, Canadian Economics Association, vol. 29(4), pages 930-940, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Igor Gurkov, 2015. "Russian Manufacturing Subsidiaries of Western Multinational Corporations: Support from Parents and Cooperation with Sister-Subsidiaries," HSE Working papers WP BRP 37/MAN/2015, National Research University Higher School of Economics.
    2. Hamid Beladi & Chi-Chur Chao & Daniel Hollas, 2013. "Does globalization weaken labor unions in developing countries?," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 22(4), pages 562-571, June.
    3. Ranjan Aneja & Barkha & Umer Jeelanie Banday, 2021. "Regional Economic Growth and Inequality in India: A Sector-wise Decomposition Analysis," Arthaniti: Journal of Economic Theory and Practice, , vol. 20(1), pages 95-110, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chaudhuri, Sarbajit, 2007. "Foreign capital, welfare and urban unemployment in the presence of agricultural dualism," Japan and the World Economy, Elsevier, vol. 19(2), pages 149-165, March.
    2. Beladi, Hamid & Yabuuchi, Shigemi, 2001. "Tariff-induced capital inflow and welfare in the presence of unemployment and informal sector," Japan and the World Economy, Elsevier, vol. 13(1), pages 51-60, January.
    3. M. Ali Khan, 2007. "The Harris-Todaro Hypothesis," Labor Economics Working Papers 22206, East Asian Bureau of Economic Research.
    4. Yabuuchi, Shigemi, 1997. "Urban unemployment, international labor mobility and welfare," Japan and the World Economy, Elsevier, vol. 9(1), pages 71-79, March.
    5. Chaudhuri, Sarbajit, 2014. "How can trade unionism affect welfare consequences of trade and investment reforms in a developing economy?," MPRA Paper 59063, University Library of Munich, Germany.
    6. Chao, Chi-Chur & Yu, Eden S.H., 2007. "Trade liberalization, foreign ownership, and the environment in a small open economy," International Review of Economics & Finance, Elsevier, vol. 16(4), pages 471-477.
    7. Manash Gupta, 1998. "Foreign capital and technology transfer in a dynamic model," Journal of Economics, Springer, vol. 67(1), pages 75-92, February.
    8. Sarbajit Chaudhuri, 2016. "Trade Unionism and Welfare Consequences of Trade and Investment Reforms in A Developing Economy," Metroeconomica, Wiley Blackwell, vol. 67(1), pages 152-171, February.
    9. Shigemi Yabuuchi & Hamid Beladi, 2011. "Rural–urban migration and multinational firms," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 46(2), pages 417-426, April.
    10. Shigemi Yabuuchi, 2011. "Emigration promotion and urban unemployment," Economics Bulletin, AccessEcon, vol. 31(4), pages 2816-2823.
    11. Chaudhuri, Sarbajit & Mukherjee, Ujjaini, 2002. "Removal of protectionism, foreign investment and welfare in a model of informal sector," Japan and the World Economy, Elsevier, vol. 14(1), pages 101-116, January.
    12. Marjit, Sugata & Beladi, Hamid, 2003. "Possibility or impossibility of paradoxes in the small country Harris-Todaro framework: a unifying analysis," Journal of Development Economics, Elsevier, vol. 72(1), pages 379-385, October.
    13. Titas Bandopadhyay, 2005. "Universal Education And Its Impact On The Child And The Adult Labour Market," GE, Growth, Math methods 0511002, University Library of Munich, Germany.
    14. Chaudhuri, Sarbajit & Mukhopadhyay, Ujjaini, 2013. "Foreign direct investment, environmentally sound technology and informal sector," Economic Modelling, Elsevier, vol. 31(C), pages 206-213.
    15. Chaudhuri, Sarbajit, 2014. "Foreign capital, non-traded goods and welfare in a developing economy in the presence of externalities," International Review of Economics & Finance, Elsevier, vol. 31(C), pages 249-262.
    16. Hamid Beladi & Chi-Chur Chao & Daniel Hollas, 2013. "Does globalization weaken labor unions in developing countries?," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 22(4), pages 562-571, June.
    17. Hamid Beladi & Avik Chakrabarti & Sugata Marjit, 2010. "Skilled‐Unskilled Wage Inequality And Urban Unemployment," Economic Inquiry, Western Economic Association International, vol. 48(4), pages 997-1007, October.
    18. Mukherjee, Soumyatanu, 2012. "Revisiting the Apparent Paradox: Foreign Capital Inflow, Welfare Amelioration and ‘Jobless Growth’ with Agricultural Dualism and Non-traded Intermediate Input," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 27, pages 123-133.
    19. Bandopadhyay, Titas Kumar, 2002. "Foreign enclaves, informal sector and urban unemployment: A theoretical analysis," MPRA Paper 3136, University Library of Munich, Germany.
    20. Chaudhuri, Sarbajit & Banerjee, Dibyendu, 2010. "FDI in agricultural land, welfare and unemployment in a developing economy," Research in Economics, Elsevier, vol. 64(4), pages 229-239, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:rdevec:v:14:y:2010:i:1:p:93-102. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1363-6669 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.