Recently, much attention has been paid to the role of direct foreign investment as a potent agent of economic transformation and development, not only in the more laggard developed countries but also in the developing countries. The essence of direct foreign investment is its transmission to the host country of a package of capital, managerial skill and technical knowledge. Direct foreign investment (and therefore activities of multinational corporations) is one of the most efficient means of transferring technology to developing countries but, because of host country nationalism, there have been strong demands for an ‘unpackaged’ transfer of technology.