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MODERN BUSINESS ENTERPRISE BS 3561 DR. MAX MUNDAY DANIEL GUY WALTON 01 0204100 'Does the economic theory of the multinational enterprise suggest that such firms will cause positive productivity spillovers into host economies?' WED 20TH APRIL 2005 'Does the economic theory of the multinational enterprise suggest that such firms will cause positive productivity spillovers into host economies?' In recent years the British government has spent substantial sums of money in order to attract foreign multinational enterprises to the UK. The equivalent of around $30,000 per employee was offered to attract Samsung Electronics to the North East of England and around $50,000 per employee to Siemens to tempt them into investment in Newcastle. Apart from the obvious direct job creation that such multinationals would bring, one of the main reasons for attracting these investments, that economists frequently mention, is that they lead to 'productivity spillovers'. The basic ideas is that multinationals, like Microsoft and Intel, take high levels of technology...

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