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TRANSNATIONAL CORPORATIONS' IMPACT ON HOST ECONOMIES

L. Darmo, Z. Brincikova

Abstract

Transnational corporations grew up rapidly in 90s years of 20th century. They have acquired very strong position in world economy and started to play an important role in influencing particular national economies. Transnational corporations affect host economies through two channels – by foreign direct investment and international trade. Objective of the paper is to estimate the importance of foreign direct investment inflow, export and import on labour productivity and unemployment (two most common factors in analysis of transnational corporations) that have further direct impact on economic growth. In this view, paper´s effort is to examine these most proclaim advantages of corporations entrepreneurship in host economies. As the result shows, there is positive impact of foreign direct investment on labour productivity. Also, it indicates the negative sign of coefficient for foreign investment in case of unemployment. That implies that higher volume of investment decreases the unemployment what is in fact a positive for economy. Export is positive and statistically significant only in influencing labour productivity, but it has no effect on unemployment. Also, there is no clear impact of import on labour productivity and unemployment.2

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DOI resolver: doi.org/10.5593/sgemsocial2014/b23/s7.092

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