Market Rivalry, Government Policies and Multinational Enterprise in Developing Countries

Abstract

The governments of less developed countries (LDCs) often complain that the subsidiaries of foreign multinational enterprises (MNEs) employ capital-intensive, rather than labour-intensive, techniques of production. The reasons for this concern are that the capital-intensive techniques generate relatively little employment, entail more expenditure in terms of scarce foreign exchange and the products made with those techniques yield relatively little benefit (in a sense discussed below) to consumers.