A History of Multinational Corporations and Development in Nigeria
CHAPTER ONE
OBJECTIVE OF THE STUDY
The main objective of this study is to critically look into the history of those multinational corporation in their host nations mostly developing nations if their existence has positive or negative impact on the development of the host country.
CHAPTER TWO
REVIEW OF LITERATURE
INTRODUCTION
The essence of this literature review is to explore the various write-ups and publications that view multinational corporation as agents of development.
A multinational corporation is a company that has subsidiaries in several countries. Their decentralized structure as well as their sheers size, often allow them to work without government constraints which small regional or national companies must companies must observe.
Developing nations attract multinational subsidiary operations due to a number of actors such as cheap labour, low taxation and less vigilance concerning workers rights and environmental protection. They are made to contribute to the social security net (i.e welfare, unemployment insurance, e.t.c.) other fact, including low pay for woman workers, child labour and the absence of labour unions, also combine to make the developing nations ripe for prospect the presence of multinational in these countries improves overall standards of living. The benefits of the relationship may be one-sided, but the economic problems facing these nations makes it difficult for them to be picky about their investors.
DEFINITION OF MULTINATIONAL CORPORATION
A multinational corporation may be defined as an enterprise having a home in one country, together with related facilities in the other countries. It could also be a business enterprise organization in one society with activities abroad growing out of direct investment. Typically, and multinational corporations consist of the parent company and wholly or partially owned subsidiaries located aboard.
THEORETICAL REVIEW
Three theories were reviewed to explain the relationship between multinational corporations and Nigerian Economy. They include New Trade Theory, Unequal Exchange and Dependency Thories.
New Trade Theory was propounded by Tejvannne and Pettinger(2013).It proposes that a critical factor
in determining international patterns of trade are the very substantial economies of scale and network effects that can occur in key industries. These economies of scale and network of effects can be so significant that they outweigh the more traditional theory of comparative advantage. Economies of scale are factors that cause the average cost of producing something to fall as the volume of its output increases. Economies of scale were the main drivers of corporate gigantism in the 20th century. They were fundamental to Henry Ford’s assembly line and they will continue to be the spur to many mergers and acquisitions today.
CHAPTER THREE
HISTORY OF THE MULTINATIONAL CORPORATION
The opening of world trade 700Ad – 1600. The most basic foundation of multinational corporation is trade between tribes, among regions, or across established political boundaries. Although accounts of the barter of goods or services among different people can be traced back almost as far as the record of human history, the opening of major global economic connections can be considered; the first prerequisite for modern globalization multinational corporation.
By about 100AD, it was possible, if sometimes dangerous and difficult, for merchant and travelers to traverse the “known” world from England to China and Japan. These trade route were the first global links by which raw materials, food and luxury goods became available for their original by the 1600, the Portuguese and Spanish had opened sea route which spanned the globe. Below I will like to briefly and partially select some major trading routes and system.
CHAPTER FOUR
THE EFFECT OF MULTINATIONAL ON THE INVESTING COUNTRY
The time perspective plays an important role for the balance of payments of the investing country’s. If the investment in the country is given 21.4 one injection, it would take six years for it to pay off, in the sense that the balance of payments of the investing country would again be positive. If the direct investment, instead, consisted of a steady flow of $100 million per years, it would take eleven years to reach equilibrium, if the flow of direct investment increased by 22 percent per year, it would never pay off.
In the long run, direct investment ought to have a positive effect on the investing country’s balance of payments. This is especially the case if the flow of direct investment is steady. We can see this effect today on investment from the United State and some other developed countries in their dealings with several developing countries (DC’s). If the flow sharply increases, there could be marked adverse effects on the balance of payments. Direct investments undoubtedly strained the United State external position in the late 1950’s and 1960’s.
CHAPTER FIVE
CONCLUSION AND RECOMMENDATION
CONCLUSION
In conclusion, with the efforts and contributions of multinational corporation to the developing countries (DC’s) they have lay a foundation for the take off of technological advancement and free the countries like what happen in Brazil as benefit of Germany technology.
Finally, the multinational corporation had done more good than most governments in the developing countries (D.C’s). the policies makers should learn from the multinationals, ways to make an formulate a sustainable policy toward development of national growth and development.
RECOMMENDATION
In view of the analysis, this extended essay has recommended that:
- The government of developing countries should as a matter of urgency learn to develop the skills acquired from the multinationals by citizens of these countries to develop their own technology for better tomorrow.
- Radical approaches should be adopted to transform the economy of the developing countries through their relationship with home countries of the multinationals.
- The developing countries (D.C’s should invest financial resources in research and development so that they can advance in technology.
- Long-terms plans on industrialization should be subjected to constant appraisal an review by professionals in related field of study so that our generation can witness positive change in terms of economical emancipation.
- Steps should be taken to encourage the local industries and soften term loans with little interest rate, tax relief or holiday, to create an enabling environment for advancement.
- Technology only comes when the human resources has been utilized. Education should be given a priority and they should prevent and discourage “brain drain” by motivating its academicians and intellectuals whose presence and effort will help make Nigeria a better place.
BIBLIOGRAPHY
- Ake C (1981). A Political Economy of Africa 1st edition Nigeria Longman.
- African Business The December 2003 edition.
- Ben. G. (1999). Economic crisis in Nigeria Longman.
- Kindle B. (1969). “The theory of investment” American Business Abroad. New Haven; Yale, University Press.
- Nabudere D. (1997). The public economy of imperialism dereasalamzed Inc.
- James, P. (1968). The theory of investment and finance. California, California University press.
- Offiong D. (1989). Imperialism and dependency; 4th edition publishers.
- Onimode, B. (1989). Nigeria International Economic Relation NIIA.
- Snider D. (1979). Introduction to International Economic Irioin Inc.
- Streeten P. (1978) . Foreign investments, transnational and development countries, Macmillam press.
- Temile, Y (1998). The theory and practice of investment Nigeria Longman Inc.
- Websites, News Papers and Magazine Guardian, the Monday newspaper, Oct. 7th 2003.
- Web Document on Multinational corporation (no date) retrieved December 10th 2003.
- Web Document on History of multinational corporation notable firm and their activities. www.bigg picture mell world.com/globa %
