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Foreign Investment and Economic Development: Conflict and Negotiation


This paper is part survey, part essay. The survey consists of a partial review of the literature on the subject of foreign direct investment in developing countries, with particular emphasis on conflict and its resolution through negotiation. After a brief discussion of the objective functions guiding the strategies of both main actors, the paper turns to a review of the substantive and institutional context surrounding the negotiation process between multinational firms and host countries. Next follow some general principles, common to most negotiations, drawn from the experience obtained in other fields, and a discussion of the relevant literature on international business negotiations. Last, the essay integrates the various threads of analysis into a series of normative conclusions which, while not pretending to be imperial, are offered as challenges for further study.

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*José de la Torre is Professor of International Business at the European Institute of Business Administration (INSEAD), Fontainebleau, France. During most of the 1980–1981 academic year, he served as Senior Policy Analyst, Office of the Secretary, U.S. Department of Commerce.

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De La Torre, J. Foreign Investment and Economic Development: Conflict and Negotiation. J Int Bus Stud 12, 9–32 (1981).

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