Abstract
The role of foreign private investment in the development process is an area rich in controversy. Advocacy and opposition to such investment ranges to extremes. The supporters believe that it can not only confer all the benefits of official aid on the recipients but also impart certain additional benefits. The foreign capital that it provides can bridge both the foreign exchange and savings gaps; and the technology that it imparts can bridge the technology gap. It can redress regional disparities and confer a host of other benefits in the form of linkage effects which it creates, and employment opportunities which it provides, all congealed in the catch-all phrase, ‘externalities’. The advent of the multinational corporation in recent years has even produced prophetic visions of a new integrated world order. It is argued that, under the aegis of these giant international corporations, managerial and financial resources would flow to sources of raw materials, and cheap labour and the fruits of technology would be widely disseminated The trend would be towards the development of an integrated world economy dominated by the international corporations with wide access to financial and technical resources, and not towards the development of national economies.
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Notes
Peter Ady (ed.), Private Foreign Investment and the Developing World (New York: Praeger, Special Studies in International Economics and Development, 1971) p. 3.
John H. Dunning, Studies in International Investment (London: Allen & Unwin, 1970) pp. 4–5.
See Richard E. Caves, ‘International Corporations: the Industrial Economics of Foreign Investment’, Economica, February 1971.
Also Mac-Bean, ‘Economic Aspects of Direct Investment,’ Kajian Ekonomi Malaysia, December 1972.
J. W. C. Tomlinson, The Joint Venture Process in International Business, India and Pakistan (Cambridge, Mass.: MIT Press, 1970) p. 44.
J. S. Fforde, An International Trade in Managerial Skills (Oxford: Blackwell, 1957).
Grant L. Reuber et al., Private Foreign Investment in Development (London: Clarendon Press, 1973) p. 251.
G. D. A. MacDougall, ‘The Benefits and Costs of Foreign Private Investment from Abroad: a Theoretical Approach’, Economic Record, Special Issue, March 1960.
G. C. Hufbauer and F. M. Adler, Overseas Manufacturing Investment and the Balance of Payments (Washington: United States Treasury Department, 1967).
Streeten and S. Lall, Main Findings of a Study of Private Foreign Investment in Selected Developing Countries (Geneva: UNCTAD, 1968).
Kindleberger, American Business Abroad (New Haven: Yale University Press, 1969).
Streeten, ‘Costs and Benefits of Multinational Enterprises in Less Developed Countries’, in Dunning (ed.), The Multinational Enterprise (London: Allen & Unwin, 1971) p. 250.
See Little, ‘On Measuring the Value of Private Direct Overseas Investment’, in Ranis (ed.), The Gap between the Rich and Poor Nations (London: Macmillan, 1972).
Edith Penrose, The Large International Firm in Developing Countries (London: Allen & Unwin, 1968) p. 273.
For a detailed analysis of this issue see H. G. Johnson, ‘The Efficiency and welfare implications of the International Corporation’, in C. P. Kindle-berger (ed.), The International Corporation (Cambridge, Mass.: MIT Press, 1970).
For an extensive discussion of such policies in the Indian context see T. N. Bhagwati and P. Desai, India: Planning for Industrialisation (London: Oxford University Press, 1970).
Constantine V. Vaitsos, Transfer of Resources and Preservation of Monopoly Rents (Development Advisory Service, Harvard University, 1970). For other such examples see M. Kidron, op. cit.;
and Raymond Vernon, Sovereignty at Bay (New York; Basic Books, 1970).
R. B. Du Boff, ‘Transferring Wealth from Underdeveloped to Developed Countries via Direct Foreign Investment’, Southern Economic Journal, Vol. xxxvlil, July 1971.
Reserve Bank of India, Foreign Collaboration in Indian Industry: a Survey Report Bombay, 1968, p. 89.
For a detailed discussion of the issues relating to technical collaboration agreements, see V. N. Balasubramanyam, International Transfer of Technology to India (New York: Praeger, 1973).
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© 1976 Alasdair I. MacBean, V. N. Balasubramanyam and the Trade Policy Research Centre
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MacBean, A.I., Balasubramanyam, V.N. (1976). Challenge of Foreign Private Investment. In: Meeting the Third World Challenge. World Economics Issues series. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-01962-5_8
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DOI: https://doi.org/10.1007/978-1-349-01962-5_8
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