) benefit to the host economy. When technology is transferred to the host country, it is often incompatible with the needs of the host economy. For example, technologies used by multinationals are usually developed in richer countries, where capital is relatively abundant. The introduction of this non-labor intensive technology to developing economies can lead to increases in unemployment.The introduction of multinational corporations may have an effect on the host countries patterns of consumption. MNCs that produce luxury goods (for example, processed foods) in developing countries often try to sell them locally. They advertise their products in order to create demand. The result is that people on very low incomes often find themselves encouraged to buy luxury items and other goods which are available to the developed countries. In fact these consumers in the,LDC’s should be concentrating on fulfilling their more immediate needs. “Those who cannot afford these luxury goods become dissatisfied”.(5) The consequences of buying products which aren’t affordable can be deadly, In an article about FDI the author talks about a particular case which glorifies the idea in the previous sentence. He states that “…when food companies from the North encouraged Third World mothers, many of whom had no access to clean water, to feed their children with powdered milk instead of breast milk.”(3) Some argue that, “these changes in consumption patterns of host countries are the result of economic development and increased prosperity”, rather than MNC activity. Multinational corporations cater to the changing demands of consumers and they do not have a hand in effecting the consumers demand. While this may be true it is also true that if an individual is presented with a better way of living it will be increasingly difficult to turn down. Simple human nature would support this fact because...
