Foreign Direct Investment and MNCs
• FDI is investment that directly leads to productive activity within the host
country
• Clearly growing importance of MNCs and FDI though some debate how
important
• It would seem that to prosper many firms need to produce and sell in a number
of countries
• Indeed, MNCs now outweigh exports as dominant means of servicing foreign
markets.
• Top 100 MNCs control about 20% world production (UNCTAD, Held).
MNCs on some estimates control around 70% world trade
• Many firms are multinational and some have a high proportion of their assets
overseas:
• Changes over time marked –both in terms of firms and industries