ABSTRACT
One of the major issues raised by the operations of transnational corporations in the Third World is their impact on local capital in host countries. There are sharply contrasting views on this question. For some, TNCs pose a major threat to local firms while for others they complement and encourage local capital. This chapter considers the main perspectives on the relationship between foreign and local capital, before discussing in some detail the comparative behaviour of local firms and TNC subsidiaries. The chapter concludes with an analysis of the internationalization of Third World firms which has attracted considerable attention in the past few years.
