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Reconciling the Scramble for Foreign Direct Investments and Environmental Prudence

Reconciling the Scramble for Foreign Direct Investments... I. INTRODUCTION There is intense competition amongst developing countries (DCs)' to attract foreign direct investment (FDI) to their various States. A similar phenomenon occurred in the economically advanced countries of the West during the industrial revolution.'- Despite the sweeping expropriation of foreign investments that characterized the period between 1950 and 1970 in some host DCs,3 transnational corporations (TNCS) still invest outside their home countries through Fm. The major attraction for TtVCS to invest offshore is the opportunity for profit.4 Besides the profit maximization objective, these companies also desire to take advantage of economies of scale and production in addition to participating in the exploitation of the abundant natural resources available in these developing countries. Due to the changing role of TNCS in nation-building, the desire to invest onshore could also be for purposes of gaining political control. As Graham and Krugman noted: "From the early 1970s until the mid-80's, most measures suggested that the role of multinationals in the world economy had largely stabilized. In particular, U.S. firms in Europe were no longer growing much faster than the European economy as a whole, while many Third World countries, finding bank lending available as an alternative source of finance, http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of World Investment and Trade Brill

Reconciling the Scramble for Foreign Direct Investments and Environmental Prudence

Journal of World Investment and Trade , Volume 7 (1): 29 – Jan 1, 2006

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Publisher
Brill
Copyright
Copyright © Koninklijke Brill NV, Leiden, The Netherlands
ISSN
1660-7112
eISSN
2211-9000
DOI
10.1163/221190006X00135
Publisher site
See Article on Publisher Site

Abstract

I. INTRODUCTION There is intense competition amongst developing countries (DCs)' to attract foreign direct investment (FDI) to their various States. A similar phenomenon occurred in the economically advanced countries of the West during the industrial revolution.'- Despite the sweeping expropriation of foreign investments that characterized the period between 1950 and 1970 in some host DCs,3 transnational corporations (TNCS) still invest outside their home countries through Fm. The major attraction for TtVCS to invest offshore is the opportunity for profit.4 Besides the profit maximization objective, these companies also desire to take advantage of economies of scale and production in addition to participating in the exploitation of the abundant natural resources available in these developing countries. Due to the changing role of TNCS in nation-building, the desire to invest onshore could also be for purposes of gaining political control. As Graham and Krugman noted: "From the early 1970s until the mid-80's, most measures suggested that the role of multinationals in the world economy had largely stabilized. In particular, U.S. firms in Europe were no longer growing much faster than the European economy as a whole, while many Third World countries, finding bank lending available as an alternative source of finance,

Journal

Journal of World Investment and TradeBrill

Published: Jan 1, 2006

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