Multinational Firms and Manufactured Exports from Developing Countries

Multinational firms have played an important role in leading the developing countries into world markets. Multinationals from the United States, Japan and Sweden have all increased their shares of LDC exports of manufactures since the mid-1960s or mid-1970s. Their importance was particularly notable in Latin America, while their role in the Asian NICs decreased. The comparative advantages of U.S. and Swedish multinationals' affiliates in developing countries resembled those of their home countries more than those of their host countries, while Japanese affiliates' exports are lore similar to those of their host countries. There are some cases in which the advantage of the multinationals as exporters seems to be that they are able to combine company comparative advantages with the location advantages of producing in the developing countries.