... of the reasons for this shift is the presence of perceived "spill-overs" from multinationals into the domestic economy. In this essay I will analyse the varying effects of these spillovers in an attempt to come to a conclusion as to the overall net effect that they have on an economy. Spill-overs: Firstly, it would be useful to take a look at the forms that spill-overs can take which, although they are closely linked, will have differing effects on the economy. Apart from the increased employment opportunities and capital inflows that arise from FDI, multinational companies will often bring in new technology into the economy. The positive effects of this introduction will often spill over into the local economy. This new technology may well be sold directly, through licensing agreements, to local producers. Inputs of production may well be required from the domestic economy, stimulating a demand expansion in that industry. Local ...

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