The world-wide expansion of multinational corporations and the concomitant rise in direct foreign investment have recently received considerable attention from economists. A continuing controversy has existed over the costs and benefits of foreign investment to both the capital-exporting and the host countries. The conflict between the interests of foreign capital and the "national" interest is particularly noticeable in the underdeveloped countries. While many of these countries have opted for the "free enterprise" path to economic growth, they lack the technical and administrative expertise, as well as political will, to explore alternatives to the foreign investment as an instrument for gaining access to the industrial countries' technological know-how and markets. At the same time there is a gradual realization that the alleged benefits of foreign investment are not automatic and that the costs may be substantial.
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