Final answer:
Foreign investment by multinationals in developing nations often exacerbates economic inequality, benefiting a small elite and contributing to the concentration of wealth due to historical colonialism patterns and globalization.
Step-by-step explanation:
Sociologists studying the effects of foreign investment by multinationals have found that such investment can exacerbate economic inequality within developing nations. While foreign investment can generate economic activity, improve infrastructures, and provide jobs, it often disproportionately benefits the elite and foreign corporations. This phenomenon is compounded by globalization, which can lead to the concentration of wealth and the loss of well-paid working-class jobs in developed countries like the United States, further increasing economic inequality there.
Concentration of property ownership and investments unequally within countries contribute to this inequality. The historical context of colonialism, which structured economies around exploitation for foreign gain, and the modern intergenerational wealth, are both significant forces in this pattern. Investments in human and physical capital are crucial for growth, but often these investments are inadequately directed towards reducing the economic disparities within nations.