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ECONOMIC IMPACT OF MNCS ON DEVELOPMENT OF DEVELOPING NATIONS
Abstract- Multinational corporations do not come into being from thin air; there must be a form, an organization, and a goal for them to be brought into existence. Many studies that have been carried out in Europe and the rest of developing nations have concentrated on the benefits of Multinational corporations but literature still remains very little when Africa and the rest of the developing nations are touched. This study sought to bridge the gap of MNC by adding more literature on factual findings from a developing country context such as Kenya. It was centered on principles of employment creation, poverty and dependency reduction and foreign direct investment. The study was geared towards the historical background of global investments while tracing their evolution from small businesses to their giant investments that today their massive capital is a real threat to the nation when issues of capital flight fall due. The study is important to policy makers in deciding whether to continue depending upon multinational corporations which result in eventual capital flight or to nurture the local companies for sustainable development. The research adopted descriptive research design. On the basis of facts presented in this study, the MNC has outlived the usefulness as a development agent. The role of MNCs should be redefined in the context of the LDCs in which they operate finally; LDCs should ensure stable political systems to ensure sound economic policies. The study also concludes that the government should take a prerogative role in supporting the operations of the MNCs since they have boosted the economic development of the developing countries with a drive towards full employment. However, the over-dependence on these MNCs should be avoided at all costs.
Index Terms- Multinational Corporations, Transfer Pricing,
Poverty and dependency, Less Developed Countries