Regulation of Multinational Enterprises by Host Countries

Abstract

Currently, there exist numerous multinational enterprises situated in various regions across the globe. Since the 1990s, the exponential surge in the quantity of multinational enterprises has undeniably contributed to the economic advancement of diverse host nations and the global community. However, concurrently, the management of these multinational enterprises has also emerged as a formidable challenge confronted by host countries. This paper examines the international economic environment as the backdrop, incorporating economic principles and international trade agreements. By conducting a comprehensive analysis of various agreements and real-life instances, it delves into the specific measures implemented by host countries to regulate multinational enterprises within their borders. Subsequently, the paper discerns the fundamental objectives behind the host country's regulation of MNEs. Furthermore, it scrutinizes the two primary challenges encountered by the host country in regulating multinational enterprises, ultimately identifying the crux of the issue, namely, the distribution of benefits between the host country and the MNEs.