The effects of foreign direct investment (fdi) on the environment in developing countries are now assessed quite differently from in the past

Keywords: Multinational corporations, developing countries, foreign direct investment, positive impact, negative impact.
1. INTRODUCTION
In this twenty-first century, MNC has become the central institution of developing nations. A significant number of MNCs started their operations in developing countries by the 1990s. The effects of their operations in developing countries are now assessed quite differently from that was done in the past. MNCs benefit from the lower labor costs and grants given by the government of developing countries in order to attract these MNCs. Moreover, lower tax rates or tax exemptions are also given to MNCs for a period in the developing countries. On the other hand, these developing countries can also gain from the investment made by these MNCs. MNCs can help reducing poverty, driving economic growth, creating jobs that utilize local people, raise employment standards by paying better wages than local firms pay. In addition, they can boost economic development by transferring technology and knowledge, improve or build up infrastructure, raise people’s standard of living. Overall, it might seem that the developing countries gain from investments of MNCs. Is that really true? Although MNCs have become omnipresent in the developing world, there has always been an uncertainty about them, in both positive and negative ways. Most of the MNCs take advantage of developing countries. They can be guilty of making pollution or doing human rights abuse. Nevertheless, laborers are paid low wages, as there are few or no trade unions to protect their rights or negotiate with the MNCs. Thus, the theoretical dispute over the effects of MNCs in developing countries is mirrored in the conflict. Apparently, two broad positions can be derived from these differences of opinion- the positive and negative. Some proponents have developed arguments that emphasize the positive results of foreign direct investment (FDI) by MNCs. They are willing to admit some gains from FDI. On the contrary, others are unwilling to accept a positive role for multinational capital under any circumstances.
In this perspective, this paper takes an attempt to address the gap by examining the contentious argument whether MNCs nurture development and, for the present purposes, discussion is limited to development in those countries known as “Developing Countries”. Accordingly, a literature review has been done on the MNCs activities in developing countries. Also, some definitions of MNCs have been given. Thereafter, some of the benefits accruing to developing countries through investments by MNCs and some of the possible undesirable consequences that may blight development in developing countries have been examined. In support of the proposed study, three case studies are presented in the last section that shows the positive, negative, and mixed effects of MNCs on developing countries.