McDonald's -- Much Maligned, But an Engine of Economic Development

Adrian E. Tschoegl, Wharton School of the University of Pennsylvania

Abstract

Critics have excoriated the US fast-food industry in general, and McDonald's most particularly, both per se and as a symbol of the United States. However, examining McDonald's internationalization and development abroad suggests that McDonald's and the others of its ilk are sources of development for mid-range countries. McDonald's brings training in management, encourages entrepreneurship directly through franchises and indirectly through demonstration effects, creates backward linkages that develop local suppliers, fosters exports by their suppliers, and has positive external effects on productivity and standards of service, cleanliness, and quality in the host economies.