Relative Profitability of Multinational Enterprises in a Developing Host Country: The Sri Lankan Experience

Abstract

Empirical evidence on the profitability of multinational
enterprises vis-a-vis local finns in developing countries appears to be
sparse and contradictory. This paper attempts to shed some light on this
aspect through an analysis of the balance sheet data of a sample of
manufacturing finns in Sri Lanka. The analysis does not support the
generally-held view that multinational enterprises are more profitable
than their local counterparts. It suggests that profitability cannot be
explained by either origin (MNF/local finn) or sector, or
age.