ABSTRACT
Much confusion in the debate over the role of multinational corporations in economic development stems from their being perceived as a special kind of firm whose behaviour cannot be understood within the known theories of the firm. However, the main feature which distinguishes the MNC from other firms whose production and marketing activities are concentrated within one country, lies in its operations across different national boundaries. Thus, essentials of the standard theory of the firm apply equally to an MNC. These essentials are discussed here.
