Recaps

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• Recaps
• 1. MNCs can also be defined as enterprises that
  engage in foreign direct investment (FDI) and own
  or control value-added activities in more than
  one country
• - they have employees, stockholders, owners
  and mangers spread across different countries.
• 2. Theories of MNCs
• - Oligopolistic theory product cycle
• - Product cycle theory
• - Internalisation/organisational theory
• - OLI theory
• - Obsolescing theory investment in host
  country initially gives bargaining power
  advantage due to superior technology, access to
  capital.
• - Tariff-Jumping hypothesis attempt by MNCs
  to jump over tariff and nontariff barriers.

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• Pattern and Direction of FDI Flows
• Asia, Latin America and Eastern Europe have
  experienced large inflows of FDI, while regions
  like Africa and Caribbean have had little inflows
  of FDI
• FDI flows have been concentrated in specific
  economic sectors, depending on the regions and
  countries.
• FDI flows have been subjected to political
  manipulations from industrialised countries.
• Capital market development has played a big role
  in the direction and pattern of FDI flows.
• Several efforts have been made to enhance balance
  and even distribution of FDI - UNCTAD
  Multilateral Framework on Investment (1995)

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• Foreign Aid Flows and the Developing Economies
• Development finance is a major issue in the
  North-South relations.
• The Bretton Woods Institutions (IMF, World Bank)
  have provided significant development assistance
  to LDCs since the end of World War II.
• Provision of Aid to developing countries has been
  linked with international politics both on the
  part of developed and developing countries.
• International financial institutions have
  intensified the provision of development
  assistance to developing countries IFC
  established in 1956, Inter-American Development
  Bank 1958, International Development Agency 1960,
  African-Asian Development Bank 1964.
• Aid emerged as a new phenomenon in North-South
  relation.