ABSTRACT
The past decade has seen a remarkable transformation in trade and direct investment flows, particularly between the developed economies, but also between the developed economies and the newly industrialising nations. This transformation has been characterised by a particularly rapid growth in foreign direct investment (FDI). Over the period 1983-89, the outflows of FDI grew at an annual rate of approximately 29%, more than twice as fast as the previous decade and three times faster than the growth of world exports and the growth of world output (see Table 12.1). There is an intensified effort on the part of most countries to attract this investment. Transnational companies are emerging from the developing countries as well as the developed economies and they are increasingly adopting an explicitly global strategy in many of their business activities.
