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Assessing the impact of a multinational corporation on local social capital : a case study of a semiconductor company in the Philippines Mochrie, Clare

Abstract

This research explores how a multinational corporation (MNC) in the Philippines impacts on the social relations and integration of its host community in Baguio City. A lens of social capital is used to assess how the company influences local social patterns and networks, and in doing so, affects the community's capacity for development. Although emerging theories of development emphasize the importance of social linkages, little is known about how MNCs impact on these dynamics. Therefore, this study looks at the American subsidiary of Texas Instruments in the Philippines (TIPI) to determine whether it fosters relations within the local community that will support positive modes of development, or is shaping social networks that will stand to impede the community's achievement of its development goals. MNCs are first discussed generally in the context of globalization and the political economy of the Philippines. The paper then focuses on how this particular company operates in Baguio City. It is shown how, guided by principles of corporate social responsibility and contemporary ideologies of business, this widely accredited corporation builds community amongst its employees. How TIPI affects relations in the greater community of Baguio City is also explored and the implications for community development, as predicted by social capital theory, are discussed. In summary, it was found that while TIPI fosters social capital among its employees, it stands to inhibit social connections at a broader scope within the community. In that these community-wide networks are an important component of a community's development and planning capacity, the research suggests that TIPI, despite being socially responsible, does not represent a positive force for the community's development from the perspective of social capital. Several suggestions for policy and governance are provided by which the community might better ensure that MNCs foster positive development.

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