published on blogs.lse.ac.uk, 16.08.2021
The expanded presence of multinational enterprises in the world raises questions about how a country benefits from foreign direct investment. I review the evidence on global value chains (firms organising production across multiple countries) and “superstar firms”, those accounting for a large share of overall economic activity, with market concentration. I find that governments might have to adopt firm-specific policies, weighing the benefits and drawbacks of providing subsidies to attract multinationals.