THE ROLE OF MULTINATIONAL COMPANIES IN IMPROVING
THE ECONOMIC SECTOR IN UNITED STATES
Introduction
East Asia and Asia in particular has become one of the most attractive regions for
FDI in the world. FDI is a medium in the economic system that has an interest in balancing
the dynamics of economic phenomena in the world that have become universal. In short, FDI
is a form of investment made directly without intermediaries by foreign or overseas parties.
This FDI is intended to invest for a long period of time in a company in another country. The
involvement of two countries is needed to establish FDI. FDI can be done through investing
by purchasing capital from existing foreign companies or by providing capital to build and
develop new companies in other countries.
Nevertheless, United States as the largest economy with a market of 270 million
people and huge natural resources attracts less FDI than other developing countries within
and outside the region. Although FDI inflows into the country have been steadily increasing
over the past decade. According to the Investment Coordinating Board (BKPM) which
records gross inflows based on approved FDI projects, FDI has increased from 2 percent of
GDP in 2000 to 3.4 percent in 2014. Meanwhile, according to BKPM's quarterly report, total
FDI investment realization in the second quarter of 2017 has reached IDR 206.9 trillion.
However, United States still lags behind Thailand, Malaysia and Vietnam which reached
3.2%, 3.5% and 5.1% of GDP respectively. United States economic anomaly above is indeed
requires a comprehensive understanding. A number of studies provide some plausible
explanations behind the phenomenon, mainly such as insufficient labor absorption and
unskilled labor, poor infrastructure, low quality of institutions, rampant corruption issues and
ambivalent policies or regulations (Elyta & Nuzulian, 2020).
Government policies or regulations account for much of the modest inflows of FDI
into United States. Often changes in United States government policy towards foreign
investment do send ambiguous signals to potential foreign investors. Between 1967-1974
was marked as a period of large inflows of FDI or MNCs into United States. MNC is another
term for multinational corporation which is defined as a company with the need to develop
on an international market scale which is spread across countries (Januar Heryanto, 2003).
The Foreign Investment Law No. 1 January 1967 under the new order regime became the
focal point for inviting foreign capital or multinational companies into the country. It was
only on January 22, 1974 that the government took some protectionist measures. Thus, from
1974 to 1982 United States experienced a period of revival of economic nationalism. There
were factors behind that. But it was reinforced by many parties both due to domestic
pressures and the phenomenon of rising oil prices. From then on, the United States economy
was more or less driven by export-led growth policies. The 1997 Asian financial crisis,
which hit the United States economy, did reverse United States attitude towards foreign
capital.
Currently in 2022, multinational developments are experiencing a lot of diversity and
types, increasing job opportunities for human resources in United States. However, the
problems of environmental damage and unequal welfare are the focus of the United States
government. United States has relatively consistently pursued economic deregulation
policies to create a friendlier investment climate. A large number of foreign companies are
flowing into the country. However, regulatory issues and corrupt practices still hinder the
maximum inflow of FDI. To this end, Warld Bank recommends the government to carry out
more deregulation reforms to attract more FDI. Therefore, this research discusses in detail
the role of these multinational companies with the economic sector in United States.
Overview
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
Multinational Company
The definition of a multinational company is a company consisting of several
companies that provide opportunities to invest foreign capital and contain activities with an
increasing entity value in a country. The representation of the multinational company
includes involvement in an action that is carried out with an orientation to an internal
characteristic of the multinational company. The type of coordination that is carried out from
several accumulated corporate problems must be concerned with one first study, namely
economic activities and related to coordinated actions between countries. The characteristics
of multinational companies integrated with domestic companies will also cause many
judgments or perceptions because both have different entities. On the one hand,
multinational companies can be used as a place of coordination and control in production but
must also involve the role of other parties to launch the production activities. Meanwhile, the
nature of multinational companies builds an image that continues to grow because the nature
of the origin of multinational companies is a broad international scale.
Activities involving multinational companies invite many roles from other parties so
that their implementation requires many regulations and policies to regulate these
developments. The existence of transaction activities carried out must be prioritized
regarding the market situation and the existence of market prices that have been arranged in
such a way as to balance the existence of the domestic market. Regulations regarding
taxation in multinational companies also need to be developed to anticipate mistakes in the
application of certain activities or activities. Some examples of multinational companies in
United States include PT Toyota, PT Astra and PT Multi Bintang.
Economic Sectors in United States
The definition of the economic system as a method applied in a country with efforts
to take certain actions oriented towards the economic activities of a country (Abdul Rahman
Suleman et al., 2021). This can be seen from several financial institutions in the country as
well as given the existence of desire in a certain achievement. In an economy, there also
needs to be several actions that affect the economic system of a country such as ideology to
identity (Edwin Basmar, Bonaraja Purba, Nur Arif Nugraha, 2021). In United States itself,
this economic system will be integrated with economic sectors that are easy and widely
practiced by people in United States. The potential of natural resources in United States is
very abundant, this has triggered many types of jobs or livelihoods that are categorized as
economic sectors in United States. Some of the economic sectors in United States, which is
considered an agrarian and maritime country, include agriculture, plantations, marine,
forestry to industry and trade. These various sectors have attracted a lot of interest from
foreign countries to invest in United States. Agriculture itself is a superior livelihood or
economic sector in United States with its characteristic of being an agrarian country
supported by the tropical climate in United States. The main agricultural products that can be
accepted by foreign companies are fruits, rice to vegetables and corn crops. Plantations
themselves also have important potential, especially in export activities such as rubber to
rattan which has been widely recognized as a material for making crafts on an international
scale and palm oil. Marine products considering that United States also has a larger ocean
area than land so that a lot of marine potential is stored such as abundant fish harvests to
other marine biota such as shrimp, crabs to squid and octopus.
United States has a lot of potential that is ogled by foreign countries, one of which is
an industry that has worked with many multinational companies such as the steel industry to
several other manufacturing companies. Mining is also known as one of the sectors with the
largest revenue in United States. Such as the results of petroleum, gold and even asphalt and
coal mines. Meanwhile, in the tourism sector, United States has a lot of tourist attractions
that can be used as one of the economic opportunities for the community. Some attractions,
both natural and artificial to history, attract many tourists. This can support United States
popularity in the international eyes and increase United States state revenue through the
tourism sector. In trade activities, United States also has great opportunities by trading
domestic industries and processing raw materials into finished materials to be exported to
other countries. Products that are traded can penetrate the international market because of the
advantages of the United States state that has this potential.
Research Methods
The research method used is a qualitative research method with a descriptive type.
The data sources used are some information related to the exact data of economic
development in United States derived from the results of research data and secondary data
sources in the form of several references relevant to the research topic. The data collection
technique used is a literature study with literature searches. Meanwhile, the analysis
technique used is the Miles and Huberman method in the form of data reduction activities
followed by a detailed and detailed presentation of the data regarding the results of the
analysis carried out to make conclusions on the findings of the analysis.
Discussion Result
Improving Trading Performance
One of the important roles or significant impacts of FDI and MNCs on the United States
economy is to increase trade and in turn accelerate economic growth. The impact of MNCs
on trade performance can be measured by more MNC involvement in export-oriented
projects. Although the role of foreign firms as catalysts for manufacturing exports in United
States is often indirect, it is still significant. The assumption that MNCs have a huge positive
impact on improving the manufacturing sector is threefold. First, MNCs or foreign firms will
bring relatively high productivity. Comparing foreign and domestic plants in manufacturing
on total factor productivity (TFP) reveals that foreign firms have higher productivity than
their domestic counterparts. It also shows that wholly foreign-owned firms have relatively
high productivity. Total factor productivity between 1990-95 and found that foreign firms
had high productivity growth. Data year 1983-1996 further confirms that foreign acquisition
of domestic crops increases productivity (Januar Heryanto, 2003).
Multinational companies can be a bridge to improve trade performance because
there are many potential natural resources. The existence of investment activities carried out
in multinational companies with the existence of investment activities that can be carried out
coupled with the lack of labor wages that increase demand from foreign countries. Trade
performance can be relevant to industrialization activities in United States. The amount of
development that continues to increase and creates dependence on foreign capital. This
multinational company causes an increase in GDP and creates many companies that start
from investment activities in a multinational company.
The financial circulation in United States greatly affects the income system in United
States. The achievements of each company also vary depending on the capacity of the ability
of each company to manage financial statements (Pratiwi, 2017). The achievements made by
each company in achieving achievements require good performance so that it can be rated
well in every assessment of the company. Optimizing financial performance can also provide
more strength support in a work program launched or designed by a multinational company.
The value of a company that has been registered as a multinational company will increase if
it is willing to regulate the circulation of shares in its company. This is to attract investor
interest so that a company continues to have a positive reflection on the price of certain
products as well as stock products issued by the company. This increase in company value
has a major impact on trade in United States and causes a lot of positive impacts that can be
done well.
Technology Upgrade
Successful industrial upgrading is an indicator of the ongoing technology transfer
process. The low performance of industrial upgrading in United States is matched by the
relatively limited technology transfer resulting from FDI. A number of studies found that
technology transfer has occurred mainly through on-the-job training and is limited to basic
technological capabilities (Suprijanto, 2011). Moreover, FDI and related technology transfer
have generally been ineffective in enhancing the technological capacity of national and local
industries, in stark contrast to the performance of economies such as Singapore. Studies offer
several possible explanations for this poor performance. Frequent shifts in foreign
investment policy have given conflicting signals to foreign investors about what is expected
of them. Furthermore, the emphasis on export-oriented investment has brought about the
unintended effect of stifling technology transfer. The implementation of this technology is
also very impactful regarding the improvement of technology, this is because the existence
of companies that have a good trading sector will also produce optimal technology to be
implemented properly. The urgency of this technology is to facilitate the performance of a
job within the company. Things related to technology can be utilized properly and optimally
and efficiently if their use is in accordance with the capacity and usefulness of a technology.
Technology that is widely used by multinational companies has many uses such as
producing large quantities of goods and production prices that tend to be small. In addition,
other considerations such as the usefulness of a product to be applied in companies that
require fast performance quality can also be done with the implementation of technological
developments.
Negative Impact
Developmental Dependency
The idea of sustainable development is that developing countries are experiencing a kind
of industrialization, but the nature of the economy is still dependent on developed countries.
In terms of FDI or MNCs, the idea goes further by stating that what MNCs are doing in
developing countries is indeed exploiting them by collaborating with the comprador class.
To some extent, this explanation is also true in United States. Although FDI or MNCs have
successfully operated their production plants in United States, the main components have to
be purchased or supplied from their home factories/parent companies. One example is the
case of PT Astra International, the largest integrated automotive company in United States.
To maintain production, they have to import their engines from Japan. Another case is that
PT Boma-Bisma Indra, which produces Deutz diesel engines, has to import key components
from Germany, and so on. In most cases, multinational companies are reluctant to produce or
buy intermediate products from the domestic market. They prefer to import them from their
affiliates abroad which will create dependency on the primary producer as well as research
(Januar Heryanto, 2003).
Furthermore, they used to manipulate the prices of these goods to avoid local taxes
known as transfer pricing. In addition, MNCs, according to Heryanto, also pose some major
problems in the United States economy such as declining cosmetic and corporate
investments due to the oligopolistic nature of MNCs. He further argues that rather than
reinvesting profits in domestic factories, MNCs prefer to transfer them to their parent
companies of origin. In short, despite the possibility of industrialization and positive
economic growth caused by the entry of MNCs into United States, in reality the entire
production process is controlled, dominated by and dependent on their home parent frims.
This means that this industrialization and economic growth is very vulnerable. MNCs in the
petroleum sector dominated by US and Western companies hold a larger share of returns
than United States (Triwastuti, 2017).
Limited Technology Transfer or Development
One of the conventional wisdoms on the benefits of FDI or MNCs to LDCs is technology
transfer. A large body of literature on the channels through which technology is transferred
from developed countries to LDCs is through FDI or MNCs. The presence of MNCs in
LDCs is seen as an appropriate route and a favorable channel of technology transfer.
Technology transfer is not as massive and widespread as many have assumed. A further
survey of existing studies will show us that technology transfer through MNCs to domestic
firms is very limited and uneven. In United States, the policy of government to accelerate
industrialization through the process of technology transfer by multinational companies has
generally not been very successful.
While some large firms did emerge at the macro level, overall MNCs failed to raise
viable domestic firms. This is due to the following possible causes. First, most MNCs in
United States operate in the natural resource sector and they are highly geographically
concentrated and have a high import content. Hence, they are less integrated with the
domestic economy. Secondly, most domestic firms do not have sufficient absorptive
capacity and their human resources have inadequate skills.
Exploitation in the Industrial Sector
One of the contentious issues about the impact of FDI or MNCs on LDCs is employment
opportunities and high wages. Proponents of MNCs see that these international companies
will create more employment opportunities and in turn reduce unemployment. At the same
time, they also argue that such credible international companies are committed to high
wages. That is one face of MNCs in LDCs, a good face. The other surprising face turns out
to be that MNCs are perceived more as a threat and rival to organized labor. Most European
trade unions oppose MNCs because they feel that their bargaining power is threatened by
their mobility. Since MNCs usually respond to volatility in the global market, labor is
threatened and does not have many options to bargain with them. globalization as a moment
of exploitation is also carried out on a large scale so that the impact given can change the
view of the economy to give rise to communitarianism which will be identified with
community values for a group of people based on thoughts from research (Hartanto, 2018).
Workers are usually less organized and do not have a bargaining position to negotiate with
multinational companies. As a result, workers become victims of human exploitation.
Several large foreign companies in United States are suspected of practicing exploitation.
However, if the company has the right strategy in solving this problem by organizing or
implementing CSR or corporate social responsibility, there will be a decrease in losses
related to the degradation of environmental potential. The role of multinational subsidiaries
is often to directly carry out adaptations with several local practitioners as well as
environmental leaders to find the right legitimacy within the company to discuss
environmental management (Titisari, 2017). The subsidiary also has the authority and power
to implement several local practices that can be used to find the right solution to problems
related to environmental exploitation without overriding the existence of the parent
company. Implementation of CSR in a multinational company environment to provide a
measure of limits related to the exploitation carried out (Sari et al., 2016). By each company
regulation. CSR has a complexity that is quite complicated in determining a decision that
will have an impact on the sustainability of a solution framework in determining the
resolution of environmental exploitation problems.
Causes of Collusive Practices between the Government and the Environment
The main motive of MNCs abroad is to make more profits, no matter what and how. In
most developing countries, political power structures and bureaucratic practices are largely
arbitrary. In turn, this allows more opportunities and space for MNCs to take the necessary
steps to complete their projects, legally or illegally. This research is in line with (Risal, 2015)
many negative impacts that occur such as natural disasters or damage due to the actions of
multinational companies that do not pay attention to the environment. This condition creates
an unnatural conspiracy between opportunistic politicians and bureaucrats, and foreign
companies. Making a long list of MNCs' advantages and disadvantages to LDCs is not a
good way to measure and compare whether they are good for LDCs or not. Indeed, there is
no agreed standard to accurately measure the real impact of MNCs on LDCs (Youngster,
2021).
Conclusions
A critical review of existing studies on multinational corporations in United States
shows that they may bring both beneficial and unfavorable impacts to the country's
economy. Economic spillovers, technology transfer, and improved trade performance largely
highlight the beneficial impacts. The argument behind this story flows from the economic
development agenda in which it is proposed that in order to narrow the development gap
between them and developed countries, they need to liberalize industrialization by opening
the door as widely as possible for MNCs or FDI. The presence of MNCs in United States can
increase the productivity of people who have a major influence on the economic system in
United States. An economy that adheres to the Pancasila system provides space for all
people to feel prosperity and equal distribution of facilities that can benefit the community
and increase comfort for the community itself.
