The issue of the impact of multinationals on least developed countries has been a controversial and much debated topic in the field of economic and development studies. Researchers using various models such as Rostow's development model, Harrod Domar's model, and neoclassical theory model, have studied these impacts and tried to come to a conclusion on this issue. The researchers also conducted numerous case studies to thoroughly investigate the factors contributing to the impacts and whether there are differences due to external factors. The issue has gained greater prominence over the past decade and this paper attempts to find out whether the impacts are beneficial enough to support the activities of transnational corporations in less developed countries. The first section is a literature review, which will consist of a brief clarification of economic development and explain different theories of economic development, which will help to evaluate whether the activities of transnational corporations help accelerate economic development in less developed countries. It will also contain several definitions of outsourcing, networking and linkages by scholars who will further evaluate the costs and benefits of these activities by transactional companies. The analysis section will consist of a case study on Nigerian offshore drilling. This case study provides a more in-depth analysis of the negative impacts that multinationals can have on less developed countries. Transnational corporations are contributing to economic development by showing the positive and negative impacts that transnational corporations have on host countries through real-world case studies conducted by other researchers. The final section will consist of a review of all the research carried out prior to this section up to...... middle of the paper ......ntention to alleviate some of these problems is not guaranteed to contribute to economic development, therefore the relationship between economic development and transnational corporations may be more difficult to identify. (Huseyin 2000) Some research has also been conducted on host country governance towards the activities of transnational corporations in their countries. Bridging technological gaps is of paramount importance for least developed countries in order to accelerate their economic development and for this reason there is evidence that governments of some developing countries may overlook human rights violations committed by foreign investors provided that certain economic objectives are achieved. (Giuliani & Macchi 2004) Neoclassical theory supports this as it has been previously explained and suggests that the underdevelopment of some countries is due to the poor state of government intervention, which encourages corruption and inefficiency.