What are the options open to policy-makers in developing countries when dealing with multinationals? How can they maximize the contribution of multinational enterprises towards their economic growth?

Multinationals dominate world trade and direct investment. However, less developed countries have often regarded this power as detrimental to their fragile, growing economies and have pursued a policy of regulation. Modern economic theories of multinationals need to evaluate the effects of such policies.

By integrating theories of multinational enterprise and of development economics, the author presents a critical analysis of the various competing policy options and their consequences. Using empirical evidence from Asia, Africa and Latin America and covering such areas as imports, exports, resource utilization and new technology, the author maintains that a classical neutralist policy towards MNCs would be the most effective way of stimulating growing economies.