Course Outline

This course utilizes literature from Economics, Political Science and Sociology to examine the role of multinational corporations (MNCs) in today’s world. MNCs with their massive revenues that exceed the GDP’s of most poor countries are becoming exceedingly influential in the global economic and political arena. The goal of this course is to look at the behavior of MNCs and deepen your understanding about the decisions of MNCs, the impact of their decisions on the policies/politics of the home and host countries. MNCs undertake Foreign Direct Investment (FDI), therefore this course also examines the role of FDI in the development of poor countries, and all dimensions, i.e. economic, social and environmental are considered when evaluating the overall contribution of MNCs in the global economic and political affairs.

Reading Material

The following texts are required for this course

  • Nathan Michael Jensen, Nation-states and the multinational corporation: a political economy of foreign direct investment. Princeton University Press, 2006
  • Edward Montgomery Graham. Fighting the wrong enemy: anti global activists and multinational enterprises. Peterson Institute, 2000
  • Edward Graham and Paul Krugman: Foreign Direct Investment in the United States. Washington D.C. Institute for International Economics, 1995
    Theodore H. Moran: Harnessing foreign direct investment for development: policies for developed and developing countries. Center for Global Development, 2006.

In addition to the above readings, required reading material will be handed out in class or made available via website/email.

Critical Review:

Select two of the following books for two critical reviews (5-7 pages double spaced)

  • David C. Korten: When corporations rule the world. Berrett-Koehler Publishers, 2001
  • Stephen D. Cohen: Multinational corporations and foreign direct investment: avoiding simplicity, embracing complexity, University Press US, 2007
  • Theodore H. Moran: Beyond Sweatshops- Foreign Direct Investment and Globalization in Developing Nations, Brookings Institution Press, 2002

Weekly Topics

Week 1. Theory of the Multinational Enterprise

  1. MNCs: Powerful Players in Global Economy
  2. Why firms decide to become Multinational Corporations (MNCs)
  3. What is Foreign Direct Investment (FDI)

    4. Readings: Graham and Krugman, Ch.1

Week 2. MNCs: Forms, features and functions (types of Foreign direct Investment)

  1. MNCs: Vehicle for international borrowing and lending
  2. Location Decisions on MNCs and their impact on home and host countries
  3. Influence of MNCs on the Policy of home Country

    4. Readings: Graham and Krugman, Ch. 2

Week 3. MNCs as a vehicle of Economic Development:

  1. FDI and Development Connection
  2. MNC role in job creation and poverty alleviation
  3. Is the structural power of international capital exploitive and harmful to developing countries?

    4. Readings: Moran Ch.1, Bornschier handout

Week 4. FDI and Development

  1. Role of MNCs in the developing world: spillovers, technology transfer and contribution to growth
  2. FDI and Human Development
  3. FDI and Institutions of the host countries

    4. Readings: Graham and Krugman Ch.3

Week 5. FDI and Development (Continued)

  1. FDI in China
  2. FDI in Asia
  3. FDI in Latin America
  4. FDI in Africa

    5. Readings: Moran, Ch.2, Graham Ch.1

    Assignment: Critical Review (1) Due

Week 6. MNCs and Domestic Societies

  1. FDI and Corruption
  2. Domestic Firms and MNCs
  3. Impact of MNCs on labor standards
  4. MNCs and corporate social responsibility

    5. Readings: Graham and Krugman Ch.4, Jensen Ch.1 and Ch.2

Week 7. FDI and Democracy

  1. Regime Type and FDI
  2. Political Institutions and FDI
  3. FDI and Political Capacity

    4. Readings: Jensen, Ch.4 and Ch.5

Week 8. MNCs and National Politics

  1. Big businesses and national governments
  2. Dependence on MNCs and perceived loss of Political Sovereignty
  3. Domestic and Foreign Corporations in National Politics
  4. The problem of state capture

    5. Readings: Graham and Krugman, Ch.5, Ch.6 and Ch.7

    Assignment: Critical Review (2) Due

Week 9. MNCs and Society

  1. Environmental Impact specifically in extractive industries
  2. Human Rights
  3. Bribery
  4. Consumer Interests

    5. Readings: Moran Ch.3, Graham Ch.4, Ch.5 and Ch.6

Week 10. FDI Policies

  1. IMF and FDI
  2. World Bank and FDI
  3. Policy Prescriptions in regards to attracting FDI
  4. FDI as a development Strategy
  5. The case for regulating FDI

    6. Readings: Moran Ch.5 and Ch.6, Jensen Ch.7 and Ch.8, Graham Ch.7

Grading

Attendance is mandatory and students should come prepared to discuss readings in class. Final grade will be based on the following criteria:

Grading

Please refer to the University Student Conduct Code for policies on Academic Honesty and integrity.