Chapter 2 The Impact of Multinational Enterprises on Sustainable Development and Poverty Reduction: Research Framework

The purpose of this chapter is to develop a framework that can be used to study the impact of multinational enterprises (MNEs) on sustainable development and poverty alleviation in developing countries. In the 3-year project awarded by the EC-FP7 program, six universities from Europe and three partners from developing countries participated: Brazil, Ghana, and India. For this purpose, a thorough literature review is done and a framework is presented. To confirm the conceptual framework, we performed several case studies with three MNEs in two countries, Ghana and India. Data collection was done through qualitative in-depth interviews with managers in the headquarters of MNEs, the subsidiaries, and the “linked” local firms and host governments. Results confirm our conceptual model that the autonomy of the subsidiary, strategies of MNEs, and local government policies play a major role in achieving positive externalities from MNE operations in developing countries. The key contribution of this study is the development of a relevant conceptual framework that can be used in the overall project. Our study confirms that an interaction between the MNE subsidiary and the local government is essential for the linkages and spillovers to occur that may benefit local economic development and poverty reduction in developing countries.