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

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  • 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.

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  • 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
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    2. 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.
    3. 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.

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