Benefits and Costs for the Host Country

  • H. Peter Gray


The final section of Chapter II hypothesised that the benefit to the host nation from the local establishment of a foreign subsidiary enterprise was likely to vary both in magnitude and in the kind of industry that was attracted according to the level of income of the host country. More precisely, it was argued that the difference between the income levels of the host and the investing nations would influence the volume, pattern and profitability of the investments as well as the benefits derived by the host. Since it may reasonably be assumed that the investing nations are developed and technologically-sophisticated economies, the question of the benefits and costs of the host nation should consider ‘rich’ countries and ‘poor’ countries separately.


Direct Foreign Investment Host Country Foreign Investment Host Nation Develop Nation 


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  1. 2.
    See Everett E. Hagen, The Economics of Development (Homewood, Ill.: Richard D. Irwin, Inc., 1968) Ch. 20, particularly p. 219.Google Scholar
  2. 3.
    See particularly John H. Dunning, ‘Technology, United States Investment and European Economic Growth’, The International Corporation, ed. Charles P. Kindleberger ( Cambridge, Mass.: The M.I.T. Press, 1970 ) pp. 154–60.Google Scholar
  3. 2.
    For an analysis of plantations, their industrial features and their impact upon their host countries, see Gunnar Myrdal, Asian Drama (New York: Twentieth Century Fund, 1968) pp. 442–50 and 506–10.Google Scholar
  4. 2.
    This passage relies heavily on Thomas E. Sutherland, ‘Foreign Trade and Foreign Policy — An Uneasy Coexistence’, Michigan Business Review (May 1965) pp. 1–11.Google Scholar

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© H. Peter Gray 1972

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  • H. Peter Gray

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