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Challenge of Foreign Private Investment

  • Alasdair I. MacBean
  • V. N. Balasubramanyam
Part of the World Economics Issues series book series (WEI)

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.

Keywords

Host Country Foreign Investment Foreign Exchange Foreign Firm Domestic Firm 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Notes

  1. 1.
    Peter Ady (ed.), Private Foreign Investment and the Developing World (New York: Praeger, Special Studies in International Economics and Development, 1971) p. 3.Google Scholar
  2. 2.
    John H. Dunning, Studies in International Investment (London: Allen & Unwin, 1970) pp. 4–5.Google Scholar
  3. 3.
    See Richard E. Caves, ‘International Corporations: the Industrial Economics of Foreign Investment’, Economica, February 1971.Google Scholar
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  6. 5.
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    Kindleberger, American Business Abroad (New Haven: Yale University Press, 1969).Google Scholar
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    Edith Penrose, The Large International Firm in Developing Countries (London: Allen & Unwin, 1968) p. 273.Google Scholar
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  16. 32.
    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).Google Scholar
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    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.;Google Scholar
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    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).Google Scholar

Copyright information

© Alasdair I. MacBean, V. N. Balasubramanyam and the Trade Policy Research Centre 1976

Authors and Affiliations

  • Alasdair I. MacBean
    • 1
  • V. N. Balasubramanyam
    • 1
  1. 1.University of LancasterUK

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