Foreign direct investment as a source of skill-upgrading

by Malin Johansson

Institution: Växjö University
Year: 2009
Keywords: FDI; foreign direct investment; MNE; multinational; Africa; Senegal; training; skills; know-how; Economics; Nationalekonomi
Record ID: 1352886
Full text PDF: http://urn.kb.se/resolve?urn=urn:nbn:se:vxu:diva-5263


The last two centuries have been distinguished by technological innovation, liberalization and globalization of the world economy. Out of this environment the multinational enterprises (MNEs) have arisen -seeking the best profit opportunities around the world without consideration to poverty and equality in the host countries. This has raised the interest of the present study where the objective is to assess the impact MNEs have on the host country in terms of transferring know-how. By testing two hypotheses, the study attempts to analyze whether MNEs entail a transfer of skills and also identifies the extent to which MNEs are a potential source of skill-upgrading. The research is realized by a qualitative minor field study in Dakar where 24 semi-structured interviews are carried out at three MNEs and three Senegalese enterprises. The interviews are jointly analyzed with a theoretical framework in order to determinate if there are significant differences between the two types of enterprises concerning the wage-setting, working conditions as well as transfer of know-how. The result shows that MNEs have more training opportunities then local enterprises, the working conditions do not differ significantly. Further there is no evidence found for MNEs paying higher wages then local enterprises judged by the general attitude of the interviewees. It is therefore assumed to be some labor mobility, implying that the training contributed by MNEs might work a source of skill-upgrade for the workforce in Dakar.