ABSTRACT
The disparity in bargaining position between multinational corporations and the smaller, poorer less-developed countries breeds resentment and, occasionally, adventuristic policies of retaliation by governments that fancy themselves to have been done in by the guile and power of large foreign corporations. The ability to raise capital at home and transfer it abroad has historically been viewed as the major process carried out by the multinational firm, hence the role of multinationals as vessels for foreign investment long dominated thinking about their function in the world economy. Multinational companies have clearly become the dominant institutions in transferring technologies across national borders. Considering that Third-World countries typically lack large, and readily accessible batches of reliable data, the information and search costs tend to be quite high for foreign investment decisions in these areas as compared with investments at home or in other advanced economies.
