Transnational corporations and the control of restrictive business practices: theoretical issues and empirical evidence

Abstract

The paper examines the defence of RBPs advanced by the internalization theory of DFI. RBPs are justified since not only do they have the effect of internalization but also because in their absence transactions-costs imperfections would undermine the effectiveness of technology transfer. The claims made for the efficiency of internalization and RBPs are not proven, however, because market imperfections may well be created by firms themselves and cannot be treated as exogenous. Although the available data are inadequate they support the view that the control of RBPs does not reduce technology inflows. There is a clear need for more research on this issue.