Abstract
Multinational enterprises are at the centre of policy debates in low- and middle-income countries. As some of the most productive and innovative firms in the world, which are at the core of global supply chains, multinational enterprises (MNEs) can accelerate development in the countries hosting them, both directly with their presence, and indirectly through linkages to local economic actors. At the same time, when MNEs operate in lower-income countries, they are often blamed for environmental degradation (especially in extractive sectors), crowding out productive local firms, undermining good governance, and having lax labour standards. This VoxDevLit reviews the effects of MNEs with a particular focus on their implications for lower-income economies. We comprehensively examine the impact of MNEs on income and innovation at the country level; the linkages of multinationals with local firms in host countries; their effects on the environment and climate; the role of multinationals in sectors devoted to natural resource extraction; and the impacts on workers and their wages and labour standards in low- and middle-income host countries.