ABSTRACT
Different developments within the Spanish economy itself took place, which made Spanish companies invest in foreign ventures. In 1979 the government began a process of liberalization, which opened up the way for quicker exchanges of capital and stimulated economic growth once again. The government played a crucial role in the process of internationalization of the Spanish economy. The process of economic liberalization initiated by the Spanish government in the late 1970s was accelerated after 1986. The liberalization of public utilities sectors in the European Union was one of the factors that accelerated Spanish direct investment abroad. Resident corporations also had the choice of paying the tax that would be payable in Spain if the income had been generated in Spain. The Spanish government encouraged the use of insurance mechanisms, rather than financial agencies, as an instrument to induce private companies to invest in LDCs.
