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A comment on the multifaceted relationship between multinational enterprises and within-country inequality

Author

Listed:
  • Narula, Rajneesh

    (Henley Business School, University of Reading)

  • Van der Straaten, Khadija

    (Amsterdam Business School, University of Amsterdam)

Abstract
The capacity of Multinational Enterprises (MNEs) to upgrade economic activity in the host country is a key objective of an MNE-assisted development agenda, arguably having contributed to reducing income inequalities between countries. However, the limited evidence available suggests the gains of FDI are rarely evenly distributed within recipient countries. How do MNEs affect the extant within-country inequalities? Whether by direct or indirect action (or by inaction), MNEs can have both a positive and a negative effect on within-country social and economic inequality. We broaden our engagement with inequality beyond income levels, as this is just one aspect of inequality that shapes or impedes human development. We believe it is necessary - for both MNEs and policymakers - to have a more nuanced understanding of how, and under what circumstances, the presence of MNEs affects inequality in host economies. We therefore highlight some key issues and avenues for future research.

Suggested Citation

  • Narula, Rajneesh & Van der Straaten, Khadija, 2019. "A comment on the multifaceted relationship between multinational enterprises and within-country inequality," MERIT Working Papers 2019-035, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:unumer:2019035
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    File URL: https://unu-merit.nl/publications/wppdf/2019/wp2019-035.pdf
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    More about this item

    Keywords

    inequality; gender; FDI; employment; linkages; informality; spillovers;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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