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Dubai American Academy


LGreenbank's Waterfall RSS

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1 point

Back this up with an example Egan. Are you all talk and no walk?

1 point

But has the country not benefitted in terms of consumers having more choice as a result of this production from the MNC, and therefore hopefully lower prices as a result of more choice?

3 points

Yes, in reality this does happen. Though there is also the common dilemma for MNC's of the relative cost of bringing in workers from developed countries with them to the developing countries compared with the low wages of new workers that they could train up for the same cost as a developed country's employee's wage/salary

4 points

FDI stimulates growth for developing countries. By allowing foreign MNC's in to the country, developing countries can benefit from their knowledge, experience and technology in order to encourage their own future domestic businesses to start up in similar industries, whilst at the time of FDI from the MNC, providing jobs and training to their domestic population. This stimulates both growth in the short term as people in jobs can then increase savings, escaping poverty traps and encouraging investment which can increase economic growth, and in the long term can help start up new businesses domestically as a result of the knowledge transfer occuring from the FDI. For example, high speed trains were originally produced mainly by European companies but with their FDI in developing countries, the transfer of knowledge, particularly to places like China, has enabled domestic businesses to start up offering the same construction projects of high speed trains at home



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