ABSTRACT
The role multinational corporations (MNC) play, or could play in assisting the development process in less developed countries (LDC) is the subject of long-standing and continuing controversy. There has been an accelerating trend for LDCs to enact legislation limiting the MNCs’ equity participation to less than 50 per cent. Partnerships between state enterprises and MNCs range from contractual arrangements, such as long-term supply agreements with no equity involvement on the part of the MNC, to equity-sharing agreements with no other mutual contractural obligation. The nature of the partnership and the objectives held by either partner can have a profound bearing on its longevity. Governments always wish to control the activities of state-MNC ventures. Nominal control may be exercised internally or externally; internally by majority equity investment and by the appointment of a Board of Directors; externally by regulations and directives imposed by governmental authority.
