What is the impact of increasing international economic integration on women in developing countries? This question has been a major focus of study for over two decades now. During this time, much has been learned about the gender-specific effects of multinational corporations, export-processing zones and structural adjustment (see, for instance, Benerı́a and Feldman, 1992, Cagatay et al., 1995, Elson, 1991, Joekes and Weston, 1994, Lim, 1990, Starnberg Institute, 1989, UNCTC/ILO, 1988 and Ward and Pyle, 1995). While furthering our understanding a great deal, these studies have also led to some puzzles which relate both to analytical and policy questions. For example, is encouraging foreign direct investment a good vehicle for expanding women’s employment? Has the gender wage gap proven resistant to the increased demand for women’s labor that often accompanies rising international investment and trade? Why do the economic gains accruing to women from employment in export-processing zones sometimes seem frustratingly short-term? Can education and training fortify women’s fortunes in the export sector?
Gender-aware analyses of the international economy have been most developed in the area of international trade, partly because of the availability of empirical data and a well-defined, but controversial, general equilibrium theory, the Heckscher–Ohlin model. In the area of multinational corporations (MNCs) and foreign direct investment (FDI), the story is different. There is no one widely used theory of multinational corporate investment, and sorting out the components of FDI remains an empirical challenge. Hence, there has been very little analysis of the effects of gender relations on FDI and international production, although some have considered the effects of gender asymmetries on export competitiveness Braunstein and Hertz, 1998 and Seguino, 1997.
The other side of these relationships, the effects of MNCs on women and the gendered dimensions of MNC production in developing countries, has gotten more attention. Researchers know something about the nature of wages, employment opportunities, skill requirements and the impact on household relations of women’s employment by MNCs, particularly for those operating in export-processing zones. Much of the more recent research has focused on the increasing informalization of women’s work in international production.
In this article I take up the issue of how gender relations affect multinational operations by developing a macroeconomic model in the structuralist tradition, and considering how women’s roles outside the formal market sector impact the profitability of multinational investment. A major goal is to specify the constraints imposed by “real” capital mobility (here I refer to FDI versus shorter-term capital movements such as portfolio investment) on the prospects for increased living standards and increased equality for women. A second, more theoretical goal, is to investigate the extent to which viewing multinational investment through a gender lens will yield significant insights into the behavior of MNCs and FDI.
Such a focus is important for both developing and developed countries. MNC investment has been a significant factor in the economic development of a small but important group of countries in the last several decades, primarily in East and Southeast Asia and in parts of Latin America and the Caribbean, where MNCs have also been large employers of women in the manufacturing sector. Perhaps even more importantly, an MNC-based strategy of development has become a central part of the neoliberal model. For a decade or more, many developing countries have made the attraction of FDI a central part of their plans for economic growth. With the recent global financial crisis and growing appreciation of the potential instability of portfolio investment, FDI-based strategies may become even more popular.
In Section 2 I briefly discuss the empirical relationship between women’s employment and MNCs in developing countries. In Section 3 I present a simple structuralist macroeconomic model, investigating wages and employment as a function of aggregate demand, capital mobility and labor supply. In Section 4 I develop the central analytical contribution of this article, drawing women’s roles in the household and family structure into the model of Section 3, where gender relations become a primary determinant of investment and macroeconomic outcomes. And in Section 5 I explore the effects of three policies: an increase in aggregate demand, a decline in gender wage discrimination, and an increase in women’s productivity in the market, concluding with some general observations about the interaction between women’s power in the family and the ability of countries to attract and retain multinational capital.
