Multinational Enterprises and Developing Countries: Some Issues for Research in the 1990s

The heat of the debate surrounding the role of Multinational Enterprises (MNEs) in developing countries has subsided considerably in recent years. The closing years of the 1980s have, in fact, witnessed a general warming of attitudes to foreign direct investments, not just in the development literature, but also on the part of the national governments that were traditionally strongly hostile to multinationals. There are many explanations for this change: a ‘maturing’ of the theory of international production, with a better appreciation of the nature and advantages of MNEs; the accumulation of experience of industrialisation in the developing world, with some of the exceptionally successful countries drawing heavily on foreign investors, and with many regimes restrictive to foreign investments faring poorly; the growing capability of many developing countries to negotiate with MNEs, and, for the more advanced ones, to absorb the leading edge technologies possessed by them; the onset of the debt crisis, with the sharp fall in flows of commercial lending to developing countries; and the speeding up of the process of technological change, with a resulting need of most countries to gain speedy access to modern technologies, services and information networks.