Challenge of Foreign Private Investment

  • Alasdair I. MacBean
  • V. N. Balasubramanyam
Part of the Trade Policy Research Centre book series (TPRC)


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.


Host Country Foreign Investment Foreign Exchange Foreign Firm Domestic Firm 
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Copyright information

© Alasdair I. MacBean, V. N. Balasubramanyam and the Trade Policy Research Centre 1978

Authors and Affiliations

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

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