Factors Influencing FDI by TNCs in Host Developing Countries: A Preliminary Report

Abstract

The relationship between foreign direct investment (FDI) by transnational corporations (TNCs) and developing countries continues to be a controversial one among both researchers on TNCs and government policy-makers in developing countries.¹ The governments of some developing countries have viewed FDI by TNCs as one means of accelerating economic growth, increasing investment, expanding and diversifying their exports, and accessing product and process technology; they have promoted rather than restricted investment by TNCs.² Others have allowed some FDI, but have placed restrictions of varying severity on TNC operations.³ Others have actively discouraged, if not prohibited, FDI in most sectors of their economies.⁴