ABSTRACT
In some sectors and in some product groups within sectors, countries have prohibited foreign investment in order to preserve the livelihood of small businesses, and traditional industries and products. Governments are concerned that if transnational corporations invest in these industries, they will have a dominant position. Small businesses may also exert disproportionate political pressure in support of the barriers to entry that underlie their profitability. When it was initially enacted, Ghana's 1985 Investment Code listed twenty sectors that would be closed to foreign investment. The rationale for closing these twenty sectors was that Ghanians possessed adequate capability to own and operate businesses in these sectors. The importance of an efficient distribution system for foreign investors was recognized by the Indonesian government in 1988, when the government allowed foreign-owned producers to invest as minority shareholders in distribution firms. These firms, however, were only permitted to distribute the products of the manufacturing corporation that owned them.
