ABSTRACT
Foreign direct investment (FDI) is generally expected to play a major role in the process of export-oriented industrialisation (EOI) in developing countries. Affiliates of multinational enterprises (MNE),2 as part of the parent company’s global network, have marketing channels in place, possess experience and expertise in the many complex facets of product development and international marketing and are well placed to take advantage of inter-country differences in the costs of production. Moreover, MNEs may be better able to resist protectionist pressures in their home countries in such a way as to favour imports from their affiliates. In view of these considerations, enticing exportoriented foreign direct investment (EOFDI) has become an integral element of policy reforms toward export-led industrialisation in many developing countries. Indeed, the new receptive attitude toward FDI represents a significant departure from the conventional distrust of MNEs during the import-substitution era.
