Foreign direct investment (FDI) and multinational corporations (MNCs) play a large and growing role in shaping our world, both economically and politically. Public and academic opinion has long been mired in an inconclusive debate as to whether these phenomena are beneficial things that should be encouraged or harmful things that need intensive governmental regulation. The integrating thesis of this book is that the question as to whether they are good or bad is the wrong question and is based on the fundamentally faulty premise that all foreign subsidiaries are essentially similar, i.e., MNCs ... More

Foreign direct investment (FDI) and multinational corporations (MNCs) play a large and growing role in shaping our world, both economically and politically. Public and academic opinion has long been mired in an inconclusive debate as to whether these phenomena are beneficial things that should be encouraged or harmful things that need intensive governmental regulation. The integrating thesis of this book is that the question as to whether they are good or bad is the wrong question and is based on the fundamentally faulty premise that all foreign subsidiaries are essentially similar, i.e., MNCs are homogeneous entities and FDI is a homogeneous process. The inevitability of heterogeneity results in the imperatives of disaggregation and the fallacy of generalization if these complex, differentiated phenomena are to be properly understood. This book seeks a different path to understanding by analyzing MNCs and FDI in an eclectic, nuanced manner that makes no effort to “prove” that a simple pro or con conclusion is accurate or relevant. The main integrating themes collectively make the case that the most productive analysis of the nature and impact of these phenomena comes from acknowledging the dominance of heterogeneity, perceptions, and ambiguity and the paucity of universal truths. With hundreds of thousands of different kinds of foreign subsidiaries operating today in 200 countries and territories, an objective and informed response to the questions of their net merits and effects should be: it depends on circumstances. This book has two main objectives: first, to provide a better academic understanding of an increasingly important element of the world economy, and second, to stimulate a more relevant policy debate about the proper extent of government regulation of FDI and MNCs.