IDEAS home Printed from https://ideas.repec.org/a/taf/jitecd/v6y1997i1p101-112.html
   My bibliography  Save this article

The impact of multinational corporations on a developing country: a trade off in the long run?

Author

Listed:
  • Mariam Khawar

Abstract

This paper investigates the 'long-run' effects of multinational firms on unemployment and welfare of the host country. Our findings indicate that a trade off between unemployment reduction and national welfare exists for the host country which is contrary to the view that foreign investment via multinational firms is immiserizing in the 'short run'. This may also help explain the continuing efforts on the part of LDC governments to attract foreign investment. Furthermore, in the absence of a subsidy, increased investment by multinational firms does not have any adverse effect on the welfare of the host country, while still reducing unemployment.

Suggested Citation

  • Mariam Khawar, 1997. "The impact of multinational corporations on a developing country: a trade off in the long run?," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 6(1), pages 101-112.
    • Handle: RePEc:taf:jitecd:v:6:y:1997:i:1:p:101-112
    DOI: 10.1080/09638199700000007
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/09638199700000007
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/09638199700000007?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. 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.
    2. Ronald W. Jones, 2018. "The Structure of Simple General Equilibrium Models," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 4, pages 61-84, World Scientific Publishing Co. Pte. Ltd..
    3. Khan, M. Ali & Naqvi, Syed Nawab Haider, 1983. "Capital markets and urban unemployment," Journal of International Economics, Elsevier, vol. 15(3-4), pages 367-385, November.
    4. Khan, M. Ali, 1980. "The Harris-Todaro hypothesis and the Heckscher-Ohlin-Samuelson trade model : A synthesis," Journal of International Economics, Elsevier, vol. 10(4), pages 527-547, November.
    5. Chao, Chi-Chur & Yu, Eden S. H., 1994. "Foreign capital inflows and welfare in an economy with imperfect competition," Journal of Development Economics, Elsevier, vol. 45(1), pages 141-154, October.
    6. Ronald W. Jones, 1967. "International Capital Movements and the Theory of Tariffs and Trade," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 81(1), pages 1-38.
    7. Young, Leslie, 1991. "Unemployment and the optimal export-processing zone," Journal of Development Economics, Elsevier, vol. 37(1-2), pages 369-385, 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. Joanna Scott-Kennel, 2007. "Foreign direct investment and local linkages: An empirical investigation," Management International Review, Springer, vol. 47(1), pages 51-77, February.

    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. M. Ali Khan, 2007. "The Harris-Todaro Hypothesis," Labor Economics Working Papers 22206, East Asian Bureau of Economic Research.
    2. Chatterjee, Tonmoy & Gupta, Kausik, 2013. "Mobility of Capital and Health Sector:A Trade Theoretic Analysis," MPRA Paper 48557, University Library of Munich, Germany.
    3. Chatterjee, Tonmoy, 2012. "Child Labour and Economic Growth: A General Equilibrium Analysis," MPRA Paper 42477, University Library of Munich, Germany.
    4. Brati Sankar Chakraborty, 2008. "Capital Inflow Under Voluntary Export Restraint," Metroeconomica, Wiley Blackwell, vol. 59(4), pages 633-655, November.
    5. Hamid Beladi, 1990. "Sector Specific Wage Rigidity and Factor Accumulation," The Economic Record, The Economic Society of Australia, vol. 66(1), pages 32-36, March.
    6. Pi, Jiancai & Zhou, Yu & Yin, Jun, 2013. "International factor mobility, monopolistic competition, and wage inequality," Economic Modelling, Elsevier, vol. 33(C), pages 326-332.
    7. Hamid Beladi & Chi‐Chur Chao & Mong Shan Ee & Daniel Hollas, 2020. "Urban development, excessive entry of firms and wage inequality in developing countries," The World Economy, Wiley Blackwell, vol. 43(1), pages 212-238, January.
    8. Grossman, Gene M., 1984. "The gains from international factor movements," Journal of International Economics, Elsevier, vol. 17(1-2), pages 73-83, August.
    9. 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.
    10. Chatterjee, Tonmoy & Gupta, Kausik, 2014. "Trade Policies, Health Care and Social Welfare: A General Equilibrium Analysis," MPRA Paper 57315, University Library of Munich, Germany.
    11. Blanchard, Emily J., 2010. "Reevaluating the role of trade agreements: Does investment globalization make the WTO obsolete?," Journal of International Economics, Elsevier, vol. 82(1), pages 63-72, September.
    12. Vandana Chandra & Ralph El-Chami & Jeffrey Fischer, 1991. "Development policies in the presence of unemployment and non-traded intermediate goods," Journal of Economics, Springer, vol. 54(1), pages 1-19, February.
    13. Chatterjee, Tonmoy & Gupta, Kausik, 2013. "Trade in Health Services and Globalization: The Role of Infinitesimal Changes of Trade Policy," MPRA Paper 57343, University Library of Munich, Germany.
    14. Amar K. Parai & Hamid Beladi, 1997. "Imperfect Labor Mobility and Unemployment in LDCs," Southern Economic Journal, John Wiley & Sons, vol. 64(1), pages 180-190, July.
    15. James R. Markusen, 2021. "Ronald Jones's duality analysis as a foundation for applied general‐equilibrium modeling," International Journal of Economic Theory, The International Society for Economic Theory, vol. 17(1), pages 6-19, March.
    16. Masaharu Nagashima, 2018. "A condition for the reduction of urban unemployment in the Harris–Todaro model," Asia-Pacific Journal of Regional Science, Springer, vol. 2(1), pages 243-255, April.
    17. Biswas, Rajit, 2014. "Metzler paradox and home market effects in presence of internationally mobile capital and non-traded goods," MPRA Paper 56335, University Library of Munich, Germany.
    18. Manash Gupta, 1998. "Foreign capital and technology transfer in a dynamic model," Journal of Economics, Springer, vol. 67(1), pages 75-92, February.
    19. Chi‐Chur Chao & Mong Shan Ee & Xuan Nguyen & Eden S. H. Yu, 2022. "Minimum wage, firm dynamics, and wage inequality: Theory and evidence​," International Journal of Economic Theory, The International Society for Economic Theory, vol. 18(3), pages 247-271, September.
    20. Basu, Arnab K., 1996. "Locational choice for free trade zones: a comment," Journal of Development Economics, Elsevier, vol. 50(2), pages 381-387, August.

    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:taf:jitecd:v:6:y:1997:i:1:p:101-112. 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RJTE20 .

    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.