Globalization as a new form of internationalization has a variety of features that are manifested in the economic, social and political realms. One of the economic manifestations of globalization is what we call multinational corporations (MCNs) or transnational corporations (TNCs). These are corporations or enterprises that manage production or delivers services in more than one country. Giant corporations such as Microsoft, Uniliver, and Total are just a few examples of MNCs. While MNCs are conceptualized by free market economists as drivers of economic growth, Marxist and dependency theorists concentrate on their destructive side. This paper attempts to argue the case that MNCs are causing more harm than good for the developing countries. The paper uses both theoretical and empirical evidence from the developing world to justify the case.

1.2 Theoretical and Empirical Viewpoints

From the free market point of view, the increasing economic interdependency between states, all-round growth maximizing and beneficial operations of the worldwide market system is indispensable for growth in all domains of life. According to David Ricardo with his theory of the comparative advantage, each state has a certain economic advantage over another. While one country might be good at producing weapons for self defense, another one is good at producing oil that is important for running machines and industrial plants for the country that manufactures weapons. Therefore, the two countries have economic advantage over each other. However, this advantage is useless unless the two countries exchange their treasurers. Thus, it is through exchange that the comparative advantage becomes beneficial to countries that agree to exchange their advantages. This is a normal logic of international business embedded in the operations of MNCs around the world (Hoogvelt, 1997).

However, this view has been challenged by structural worldview. Structural world view subscribes to the Marxist theory that views the world system as constituted of units/states which have structural relationship predetermined by the world capitalist economy. This view is called structural because it challenges the assumption that national societies constitute “independent” units endowed with comparative advantage. Structuralism posits that states cannot be understood without taking into account the systematic ways through which these societies are linked to another in the context of an ever expanding network of material (economic) exchange.