Multinational Corporations

The activities of the Working Group on Multinational Corporations (MNCs) and Development are managed by a team of researchers from Denmark (Michael W. Hansen, Copenhagen Business School); France (Eric Rugraff, University of Strasbourg/GEMDEV and BETA) and Hungary (Magdolna Sass, Institute of World Economics, Center for Economic and Regional Studies). The working group is totally open and welcome new contributions of researchers and development practitioners.

The importance of MNCs for developing countries, broadly understood as emerging markets, transition economies and less developed countries, has been increasing over the last 30 years and the spread of globalization has raised a new set of issues in relation to MNCs. After being deemed as exploiters, met with reluctance from host governments, the tides have changed and many developing countries now welcome MNCs and view FDI as an important source of development. MNCs may play a central role in development by increasing economic growth and contributing to social development. But MNCs may also bring developing countries on a dependent path where local firms remain focused on low value added activities and where host countries become increasingly vulnerable to the global strategies of MNCs. More generally, the private sector's contribution to development has gained increased attention within firm strategy and management thinking as well as within thinking on development strategy. However, research on the impact of MNCs and FDI on developing countries is still fragmented and limited in various fields, and results in rare conclusive evidence, which makes it pertinent to shed new light on these aspects.

Potential Research focus areas

The research focus of the WG could include, but is by no means limited to the following areas:

1) Development implications of the constitution of global value chains

  • Risks of dependence and hollowing out of local industry
  • Opportunities of upgrading through integration into global value chains
  • Relationship between upgrading and governance types

2) Political strategies for mobilising MNCs for development purposes

  • Facilitating linkage effects and the creation of local clusters
  • Programmes to ensure the upgrading of local activities in the value chains of MNCs
  • Home country partnership programmes to increase positive impacts of MNCs on the host economy

3) Relationship between home country practices and host country impacts

  • National business systems (varieties of capitalism) and their implications for developing countries
  • Development consequences of different corporate governance practices
  • The diffusion of industrial relations from home to host countries

4) Implications of the knowledge and innovation driven economy for developing countries

  • The widening of the gap between developed and developing countries in terms of Innovation capacity and R&D
  • The role of MNCs in building national innovation systems

5) Various methodological approaches to the above listed topics, including analysis of data problems, industry studies and company case studies