Table of Contents

Governance, Multinationals and Growth

Governance, Multinationals and Growth

New Horizons in International Business series

Edited by Lorraine Eden and Wendy Dobson

In Governance, Multinationals and Growth, leading scholars celebrate and build upon the pioneering work of Edward Safarian on multinational enterprises and foreign direct investment. The book explores the linkages among multinationals and foreign direct investment, corporate and public governance, and economic growth. The contributors pay particular attention to emerging policy issues that include the behavior of individual governments, intergovernmental organizations and civil society. In addition, they address linkages among MNEs, their governance and economic growth, and generic policy realities (and innovations) in a small-to-medium-sized economy.

Chapter 11: FDI and the International Policy Environment: Back to the Future? Not Quite!

John H. Dunning

Subjects: business and management, international business, economics and finance, international economics


11. FDI and the international policy environment. Back to the future? Not quite! John H. Dunning INTRODUCTION I first met Ed Safarian when he visited me at Reading University, UK in the spring of 1965. Over a delightful lunch at a Thames-side restaurant, we discussed the progress of his seminal volume on Foreign Ownership of Canadian Industry;1 and how his research methodology and findings compared and contrasted with those of mine in my own monograph American Investment in British Manufacturing Industry, which had been published seven years earlier (Dunning, 1958). One of the key ideas behind both Ed’s and my research, and that of Donald Brash, Michael Kidron, Arthur Stonehill and R.S. Deane who, respectively, published similar studies on the role of foreign (or US) owned affiliates in Australia, India, Norway and New Zealand in the 1960s,2 was to examine the ways in which the governments of the host countries did affect, and/or could affect, the extent and pattern of inbound FDI, and its contribution to the economic welfare of their constituents. Though there were (and continue to be) significant differences in FDI related policies between countries according inter alia to their size, economic structure, institutions, GNP per head, export propensity, proximity and/or psychic distance to the major outward investor(s), and political ideology, there were (and are) many common influences – most of which were (are) exogenous to the country specific variables just identified. And it is these common in...

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