What are the options open to policy-makers in developing countries
when dealing with multinationals? How can they maximize the
contribution of multinational enterprises towards their economic
growth? Multinationals dominate world trade and direct investment.
However, less developed countries have often regarded this power as
detrimental to their fragile, growing economies and have pursued a
policy of regulation. Modern economic theories of multinationals
need to evaluate the effects of such policies. By integrating
theories of multinational enterprise and of development economics,
the author presents a critical analysis of the various competing
policy options and their consequences. Using empirical evidence
from Asia, Africa and Latin America and covering such areas as
imports, exports, resource utilization and new technology, the
author maintains that a classical neutralist policy towards MNCs
would be the most effective way of stimulating growing economies.
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