Foreign direct investment and industrial development in Mexico

Abstract:

Few issues have generated more controversy in the postwar history of North-South relations than those related to the role of foreign direct investment in the industrialisation of developing countries. OECD-based multinational corporations undertaking such investment have been accused, for example, of “denationalising" local industries and undermining the sovereignty of host countries, of engaging in monopolistic and other unfair trade practices, of extracting rents through illegal transfer-pricing mechanisms, of being major contributors to the" structural” balance-of-payments deficits associated with import-substituting indus-trialisations, notably in Latin America, and of employing" inappropriate” technologies or, worse, failing to transfer technology to the host economy. With the proliferation of “new forms” of investment and the phenomenal growth and “privatisation” of international lending to developing countries, the controversy subsided in the latter half of the 1970s. And with the emergence of the debt crisis, followed by acute and persistent constraints on new and even replacement manufacturing investment combined with slow or negative growth and strong pressures on many countries to increase their industrial exports, there has emerged a reversal of earlier positions. Many developing countries have silenced, or forgotten, their earlier critique of foreign direct investment; and many multinational companies are reluctant to undertake major new investments in devel-oping countries–turning their attention largely to investments, both national and interna-tional, within the OECD region. The development of internationally competitive manufacturing …

Año de publicación:

1990

Keywords:

Fuente:

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