Topic: “Are Multinational Corporations a problem? And whose interests do they represent”.
Recently, with the rapidly development of information technology, coupled with the deregulation and liberalization worldwide, have fueled an unprecedented surge in the growth of multinational corporations (MNCs). Some opponents believed that Multinational corporations is a problem, it has negative influences on host the countries. Meanwhile, some supporters argued that it is an engine of economic growth. To discuss this topic, I divided into three sections. In the first section, I am going to indicate the definitions of MNCs. in the second section, the influence of the MNCs for the host countries; it refers to the economic growth, employment rate, environment, the labor right. In addition, to further understand this topic, the Wal-Mart will be analyzed in the following articles. Finally, the interest group of MNCs will be emphasis on last paragraph.
The definition of MNCs: * Footless and stateless: * MNCs are kinds of Modern Corporation with legal entity, limited liability and centralized management. * It closely related to foreign direct investment. * Shortly, it can conveniently be defined as a firm base in a single home country that invests in one or more other states know as host countries.
The effect of MNCs * Positive influence: 1. Introducing superior technology to the host countries 1) Long-term economic growth is consequence of increasing external factors such as labor force, capital and the advance technology 2) MNC includes higher levels of advanced technologies and know-how. 3) Majority of developing countries have a relatively lower technology, especially, in the term of technological availability and in term of efficient use. 2. Raising the rate of employment: 1) Most of development countries are structurally unstable and are burdened by debt and higher unemployment rate, thus the when the foreign countries investment in the productions in host countries, the increased requirement of the skilled workers solve the problem that higher rate of unemployment rate, thereby lead to a more stable and prosperous economy for them. 3. Increases tax revenue for host government 4. Spillover effect: 1) Productivity spillover: it leads to increase the efficiency and productivity of host countries 2）Market access spillover: expanding export markets local firms 3）technology spillover: assist human capital formation, contributes to international trade integration, helps creates a more competitive business environment and enhances enterprise development. 5. Increases GDP of host countries The introducing of technology can increase the growth of economy 6. Stimulate the domestic economy * The negative influence: 1. Environment MNC is regarded as the creators of the pollution. Some developing countries in order to attract the foreign direct investment, they will promise some priorities for MNCs, Such as relatively lower trade restrictions and environmental standard. 2. Labor rights: 1.To keep lower price and minimize operating cost Lower price and welfare for workers Example: Wal-Mart as world’s largest private employer and it always associated with sweatshops 1) low-cost strategy
Boom in consumption expenditure in us in 1990s 2000s ------low inflation （1990s-2000s 美国消费繁荣）
Impact on compositions of labor market (对劳动力市场结果的影响)
2）Character of employment
3）Approach to industrial relations
-low wages （低工资）, high turnover(营业额)
-no minimum weekly hours.