ABSTRACT
Data now emerging on the growth and pattern of outward direct investment by several Third World countries enable us to examine more closely the relevance and validity of the eclectic paradigm of international production - and, more specifically, the investment development cycle - as an explanation of this phenomenon.l Although the published statistics are still too inadequate to allow any econometric testing, we have a much better appreciation of the character of Third World investment than we did when the idea of the cycle was first mooted in 1979 at a Conference of Third World multinationals held at the East-West Cultural Learning Institute in Honolulu.2 At the same time, since that date, there have been several modifications and extensions of the theory of international production (and those of its near relation, the theory of the multinational enterprise),3 some of which have paid particular attention both to the new international investment arena (Giddy and Young, 1983), and to new forms of international involvement (Oman, 1984).
