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Multinational Corporations and Foreign Direct InvestmentAvoiding Simplicity, Embracing Complexity$
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Stephen D. Cohen

Print publication date: 2007

Print ISBN-13: 9780195179354

Published to Oxford Scholarship Online: May 2007

DOI: 10.1093/acprof:oso/9780195179354.001.0001

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 The Case against Foreign Direct Investment and Multinational Corporations

 The Case against Foreign Direct Investment and Multinational Corporations

(p.308) 13 The Case against Foreign Direct Investment and Multinational Corporations
Multinational Corporations and Foreign Direct Investment

Stephen D. Cohen

Oxford University Press

Only the most rabid proponents deny the potential for MNCs and FDI to inflict costs and harm on large numbers of people and countries. This chapter is the equivalent of a law brief, this time one-sidedly expounding on the merits of the opposite side of the case and offering a totally different perspective on how to evaluate FDI and MNCs. Once again, no effort is made to replicate the emphasis in earlier chapters on the need for a balanced, objective approach to a subject dominated by heterogeneity, complexity, and subjectivity. The downsides of MNCs and FDI are discussed in terms of their demonstrable threat to a country's overall economic growth and prosperity as the result of the inherent conflict between their single-minded pursuit of profits and the interests of the host country's population. More specific costs such as intimidation of government officials anxious to promote and retain inward FDI, bribing regulators, tax avoidance, reduced competition in the marketplace including price collusion, diminished union and worker negotiating leverage, increased pollution, and increased capital outflows in the form of profit remittances, are also discussed.

Keywords:   monopoly power, profits, exploitation of labor, transfer prices, economic rent, cartels, job losses, offshoring, pollution

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