Multinationals in economic development: the benefits of FDI

Harrison, Ann (1994): Multinationals in economic development: the benefits of FDI. Published in: Columbia Journal of World Business No. Winter

Abstract

During her five years at the World Bank, Harrison initiated four studies involving multinational enterprises in four developing countries: Ivory Coast, Mexico, Morocco and Venezuela. These studies measure the role of multinational enterprises in promoting technology transfer; test whether multinationals push up wages for local workers; and analyze the validity of the "pollution haven hypothesis," which states that foreign investors flock to developing countries to take advantage of lax environmental standards. Harrison finds no evidence of pollution havens and shows that multinationals raise wages for local workers. However, she finds that technology transfer has generally been limited to the joint ventures who receive foreign equity participation.

• Item Type: MPRA Paper
• Language: English
• Keywords: multinational corporations; wages; pollution havens; technology transfer
• Subjects: F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms ; International Business

References

1. Montek S. Ahluwalia, "India's Quiet Economic Revolution," Columbia journal of World Business 29 (1), (Spring 1994): 6-12,

2.Mona Haddad and Ann Harrison, "Are there positive spillovers from direct foreign investment? Evidence from panel data for Morocco," Journal of Development Economics 42, (1993); and, Brian Aitken and Ann Harrison, "Do Domestic Firms Benefit from Foreign Direct Investment?" World Bank Policy [lesearch Working Paper 1248, February 1994.

3.Brian Aitken, Gordon Hanson, and Ann Harrison, "Spillovers, Foreign Investtnent, and F.xport Behavior," World Bank, November 1994.

4. Y Rhee and T. Belot, "Export Catalysts in Low-Income Countries," World Bank, 1989, which presents case study evidence of this phenomena.

5.Brian Airken at the International Monetary Fund and Robert Lipsey at the National Bureau of Economic Research, entitled "Wages and Foreign Ownership: A Comparative Study of Mexico, Venezuela, and the United States."

6. Ann Harrison and Gunnar Eskeland, "Multinationals and the Pollution Haven Hypothesis," World Bank, May 1994.

7.Gene Grossman and Alan Krueger, "Environmental impacts of a North American Free Trade Agreement," April 1992.