Working Paper #2017-041
Multinational firms and the extractive sectors in the 21st century: Can they drive development?
Historically, extractive sector MNEs have been seen as an obstacle to
sustainable development, because they operated in enclaves with limited
local engagement. Import-substitution policies aimed to increase the
local benefits of these resources, restricting FDI. Since
liberalisation, extractive MNEs have re-engaged with developing
countries through looser governance structures with greater potential
for linkages. Despite the potential, few host countries have seen
meaningful MNE-led development because of weak domestic firms and poor
location advantages. New MNEs from emerging economies have not shown a
greater propensity to local linkages. Only countries that have continued
to invest in location advantages have seen substantial benefits.
Acknowledgements: I would like to thank Ana Botella of the University of
Valencia for her research assistance and comments on the various drafts.
I am also indebted to Grazia Santangelo, Daniel Shapiro, Elisa Giuliani
and Lou Anne Barclay for their insightful feedback.
- Keywords
-
- sustainable development
- MNEs
- linkages
- emerging economies
- extractives
- natural resources
- infrastructure
- enclaves
- JEL codes
-
- F23
- F63
- F54
Cite this as
APA 7th ed.Narula, R. (2017). Multinational firms and the extractive sectors in the 21st century: Can they drive development? (UNU-MERIT Working Paper No. 2017-041). UNU-MERIT. https://unu-merit.nl/publications/working-papers/abstract/?id=7348