11.5.3—Multinational companies

A multinational company operates or owns production in more than one country. It may bring capital, jobs, technology, management and access to global markets to a host economy.

Host benefits depend on tax, labour, environmental and local-content rules, competition, supplier links and whether profits are reinvested or repatriated. Large firms can bargain for incentives and influence policy.

A food multinational may raise farmer productivity through contracts and processing, but if it becomes the only buyer it may also reduce local bargaining power.

A multinational’s gross sales are not the same as host-country value added, and “foreign” ownership does not determine every outcome without examining contracts and institutions.