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MNCs part 2 - world Since much of this is in the high-tech...

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The changing attitude toward MNC investment is, in part, attributable to the changing nature of FDI – in the 1950’s, for example, many MNC’s were primarily involved in resource extraction in the developing world – seen as a generally exploitive, low-paying sector, where natural resources were extracted and shipped to the developed world for manufacturing. As the economies of the developed world changed, manufacturing began moving to the developing world – labor was cheaper and so manufacturing shifted – some states, particularly the East Asian countries, took advantage of this and were able to develop through manufacturing for the developed world markets. More recently, we have seen a shift to service sector FDI – outsourcing call centers, etc to the developing
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Unformatted text preview: world. Since much of this is in the high-tech sector, countries like India have emphasized this as a possible route to greater development. One issue with MNC investment is the question of shallow vs deep integration – globalization has led to a situation where deep integration is practiced – MNC’s become heavily invested, and therefore tied to, the economies of states they invest in – unlike shallow integration, where an MNC could simply move production to another state easily, the type of investment and the scale of investment requires a greater level of commitment on the part of the MNC – they have to train workers, develop production sites, etc. This, for the liberals, benefits the economy of the developing country....
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