DEVS 100 Chapter 11: Chapter 11: Multinational Corporations
22 Nov 2016
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Foreign direct investment: direct investment has a physical presence of corporate form. Chapter 11: multinational corporations: differentiates this mode of investment from indirect investment. Foreign portfolio investment or hot capital flows. John dunning: pre-eminent authority on the multinational corporation: enterprise engages in foreign direct investment. Owns or controls value-adding activities in more than one country: two features of mnc that distinguish from other enterprises. Creates product based on bringing productive assets from other places. Internalizes the cross-border transfer of inputs used in production process. Transfers take place in firm, do not occur in open market. Marxist-inspired: represents global capital system negative for developing countries in which they invest: dependency theory. New international division of labour: third world locations for low cost labour, while maintaining high-value added manufacturing in developing countries with similar exploitive effects. Mercantile approach and national interest: representation of political and economic interests of home country.
