Multinational Corporations’ Role in Improving Labor Standards in Developing Countries: A Critical Review

This critical review analyzes the roles of multinational corporations in improving labor standards in developing countries. The paper questions the ability of MNCs to improve labor standards and discusses the selective and strategic flow of FDI. It also covers the link between MNCs and developing countries, the effects on labor standards, and the involvement of other organizations in this complex issue.

Running head- A CRITICAL REVIEW
A critical review
Name of the student
Name of the university
Author’s note

Running head- A CRITICAL REVIEW
In the paper- “Multinational Corporations’ role in improving labor standards in
developing countries” Mintz (2009) has discussed the roles of several investors play to improve
the labor criteria in major emerging countries also analyzing the part of multinational
corporations. The article argues about how big organization’s capacity to improve labor standard
is a different issue which is often misunderstood.
The article questionnaires multinational corporations about their ability to improve the
labor standards. The author has analyzed that as big businesses are profit seeking tycoons, their
motivations are tied up complexly with the labor standards and practices of it. The second
argument of the paper focusses on FDI; foreign direct investment of multinational corporations’.
It has a selective and strategic flow manner, allowing some of the handful of the fast-growing
countries to enjoy the influence of the labor standards. Lastly, the paper discloses that the
MNC’s are not only entitled to improve the labor standards. Other organizations like the World
Trade Organization, the United Nations, International Labour Organization, and non-government
organizations are also equally engaged with the complexity of this political and economic
backgrounds. In this article, industries that are mass producing consumer goods in developing
are taken as research sample because of being labor intensive.
The author has also thoroughly discussed international labor standards, its advancement
in the situation of different geopolitical and environment of economic and global trade. It is
known to form the paper that International Labour Organizations were ensured for overseeing
labor standards. Questions like realization of decent work evolve with a communal and economic
advancement arise in the article too. The author also covers the link between MNCs and
developing countries in the section. MNCs are always attracted to growing countries because of.

Running head- A CRITICAL REVIEW
When US, Japan, and South Korea stopped their apparel industry in essence of economic growth,
then China and rest of the developing countries barged in (Blanton and Peksen 2016).
Developing countries are also drawn towards MNCs because of their FDI.
The article also has a detailed overview of the effects on labor standards, which is the
primary concern of the research. According to Manager and Shadlen (2014), North-South trade
disproportion and the demand for low skilled affects the wages in the developing countries.
Some scholars reject this hypothesis, which is also discussed in the paper. The declination of
payments in the Mexican apparel industry has been liked in the article for comparison (Reinhold
and Thom, 2013). The author has also explained the complex reality behind the strange alliance
between the parties which hold the development of the labor standard.
However, certain drawbacks were encountered in the article. The paper does not provide
enough details about how MNCs can help in developing the labor standards in the developing
countries. The paper misses out the point that with only FDI, a state cannot be improved.
Facilities that are provided to labors matter too (Coe and Hess 2018).
Thus, Mintz (2009) shows that MNCs cannot promote labor standards and improve labor
practice at the same time. Other parties like NGOs, international organization, and regional
government has an equal role to play in improving the labor standard.

Running head- A CRITICAL REVIEW
References
Blanton, R.G. and Peksen, D., 2016. Economic liberalization, market institutions, and labor
rights. European Journal of Political Research, 55(3), pp.474-491.
Coe, N. and Hess, M., 2018. Global production networks, labor, and development.
Manager, M.S., and Shadlen, K.C., 2014. Political trade dependence and North-South trade
agreements. International studies quarterly, 58(1), pp.79-91.
Reinhold, S. and Thom, K., 2013. Migration experience and earnings in the Mexican labor
market. Journal of Human Resources, 48(3), pp.768-820.