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Multinational Firms and Export Processing Zones

K. K. Subrahmanian and P. Mohanan Pillai
Economic and Political Weekly
Vol. 13, No. 34 (Aug. 26, 1978), pp. 1473-1477
Stable URL: http://www.jstor.org/stable/4366898
Page Count: 5
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Multinational Firms and Export Processing Zones
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Abstract

The central idea behind the setting up of Export Promotion Zones (EPZs) in underdeveloped countries is to motivate multinational corperations (MNCs), through the offer of a variety of incentives and concessions, to set up facilities for labour-intensive manufacture or assembling for export back to their home markets or to other world markets. The presumption is that the operation of the MNCs will result in employment and income generation in the underdeveloped country and enlarge its export earnings. The study of the Santa Cruz Electronics Export Promotion Zone (SEEPZ) attempted in this paper shows that the operations of the MNCs have not achieved the expected results. First, the overall production and exports, as well as the proportion of value added, by units in the SEEPZ have been far below the targets. Second, the proportion of value added has varied inversely with the degree of foreign control, with Indian-owned units using Indian technology performing far better than units controlled by the MNCs.

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