_1.       Filling the savings gap. According to Harrod Domar, savings which are later channeled to investment is the main driver of economic growth. With greater investment spending, there will be more capital goods and human capital produced, thus increasing the productive capacity of the economy. In many LDCs, especially African countries, unemployment is high, those employed have decent wages and many that do not trust their financial institution. As such it is very difficult to kick start any investments due to lack of funds. Therefore inflow of foreign capital may help to patch the savings gap & enable a country to achieve targeted level of investment spending.

_2.       Filling the foreign exchange gap. Many, LDCs are facing the problem of current account deficit. LDCs which are mainly primary sector driven suffer from the fall in world commodity prices and the worsening of Terms of Trade (TOT). These attribute to lower foreign exchange earnings. With large influx of foreign capital, LDCs will have more foreign currency in their reserves. Also once established, goods produced and exported will help to minimise the current account deficit

_3.       Increase tax revenue. LDC government may also expect to be able to collect tax revenues' from both MNC in the form of corporation tax and income tax that resulted from employment created. As such there will be more available funds to meet development projects.

_4.       Increase employment opportunities to local people. Under the Lewis model, large scale rural-urban migration has caused industries unable to absorb surplus of labour force. As such increasing number of multinationals in LDC is invaluable in solving problems like urban poverty resulted from unemployment.

_5.       Promote efficiency of local farms. Foreign multinationals promote competition in the local market forcing local firms to improve their efficiency in production leading to production of high quality products.

_6.       Fills manpower gap: Multi nationals come to the country with their own skilled manpower to manage their investments. This brings into the country wide range of skills that cannot be locally trained due to inappropriate education system.

_7.       development of infrastructure. Multinational corporations tend to provide essential infrastructure such as roads and services such as electricity and water. All these promote development of an area

_8.       Promote industrial growth. By setting up their plants in the country, MNCs contribute to industrial, growth of the country.

_9.       Facilitates exploitation of local resources. Due to shortage of capital, the resources of LDCs remain untapped. With establishment of plants by MNCs, these resources are put to use:

_10.    Transfer technology. MNCs use advanced technology developed in their home countries, thus, LDCs enjoy advanced technology without going through expensive process of developing their own.

_11.    Leads to acquisition of skills. The local people employed in the enterprises established by MNCs acquire wide range of skills.      "