ABSTRACT
It has long been recognised that both the efficiency of resource allocation and the distribution of economic welfare are strongly influenced by the structure of the markets in which enterprises buy and sell goods and services, and their conduct and performance within these markets. Up to now, however, most of the standard texts and readings on the subject, 1 have confined their analysis to the behaviour of firms in the context of a closed economy and have largely ignored the phenomenon of international production, that is, the production, across national boundaries, of goods and services financed by foreign direct investment. In view of the internationalisation of production in many sectors and the dominant role of MNEs in these sectors, this omission is a little surprising. 2
