ABSTRACT
One of the anticipated benefits from foreign direct investment by MNCs is their being more able to sell in the more developed countries (MDCs) than LDC firms. This advantage is expected to come from the special tariff privileges MNCs tend to enjoy from their home governments. For example, imports of US firms from related companies (affiliates) attract lower tariffs under US law (see Helleiner 1979). Also in 1982, about 43 per cent of the value of US imports under such special treatment (tariff item 807) came from LDCs (Helleiner 1988). Furthermore, partly under this inducement, over 32 per cent of all imports into the US in 1974 came from affiliates of US corporations (Hood and Young 1979: 171). Cohen (1973: 190) also cites evidence of a more than doubling of ‘exports from LDC’s by foreign affiliates of United States manufacturing firms’ between 1965 and 1968, about 33 per cent average annual growth. Thus, it has been suggested that LDCs may look upon MNCs as their representatives in the ‘court’ of trade regulation in MDCs. The relative export advantage of MNCs is also expected from their greater familiarity with marketing techniques in MDCs as compared with their local counterparts in LDCs.
