The report looks role of human capital in economic development pdf two questions, who has been left behind in human development progress and why? Most of the nations have recorded positive trends and improved in the HDI over the last year.
Norway, Australia, Switzerland, Germany and Denmark top the table. Access the latest report, HDI rankings, data, publication library and other key information on human development. Enter the terms you wish to search for. In this article we will discuss about the role of multinational corporations in the economic development of a country. Foreign capital plays a very important role in the growth and development of most countries, at least in the early stages.
Such capital is of two types, viz. Increases in retained earnings in the acquired or established firm, under balance-of-payments accounting, are usually counted as FDI flows. Most scholars, however, consider a multinational corporation to be a large firm for which non-domestic operations account for some significant portion of total firm revenues. Most US and Japanese companies are multinationals. USA but also in India, Western Europe and Japan. It is against this backdrop that we discuss the role of multinationals in developing countries like India. The capital exporting country is called the home country and the capital receiving country is called the host country.
Reasons for International Movement of Capital: There is considerable mobility of capital in the world today. The main reason is that financial capital is the most mobile of all factors and it has an extra temptation to go abroad in search of higher return. After all, owners of financial capital, like other factor owners, seek to maximise the return on their resource. They seek to reach an optimisation goal, viz. To take Advantage of Large and Growing Markets: Firms invest abroad in response to large and rapidly growing markets for their products— mainly food and textiles.
High Per-Capita Income: Since manufacturing and service production in developed countries is catering increasingly to high-income tastes and wants, developed-country firms will invest overseas if the recipient country has a high per-capita income. Worldwide Sourcing: Another reason for direct investment in a country is that the foreign firm can seek access to mineral or raw material deposits located there and can then process the raw materials and convert them into finished goods for sale to Third World countries. Overcoming Trade Barriers: Many foreign firms set up their production units in host countries just to overcome various tariff and non-tariff barriers to trade. Many foreign firms set up production units in host countries to take advantage of low wages in such centres. It is a real attraction for MNCs to set up factories in labour abundant countries where the wage rate is invariably low in spite of the presence of trade unions and government intervention in the form of a minimum wage.