Multinational Corporations and Foreign Direct Investment
Avoiding Simplicity, Embracing Complexity
Stephen D. Cohen
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Library of Congress Cataloging-in-Publication Data
Cohen, Stephen D.
Multinational corporations and foreign direct investment: avoiding simplicity,
embracing complexity / Stephen D. Cohen.
p. cm.
Includes index.
ISBN-13 978-0-19-517935-4; 978-0-19-517936-1 (pbk.)
ISBN 0-19-517935-8; 0-19-517936-6 (pbk.)
1. International business enterprises—Finance. 2. Investments, Foreign. I. Title.
HG4027.5.C64 2006
332.67'314—dc22 2006010605
Contents
Abbreviations ix
Introduction 3
Part I Fundamentals
1 A Better Approach to Understanding Foreign
Direct Investment and Multinational Corporations 11
2 Defining the Subject: Subtleties and Ambiguities 27
3 From Obscurity to International Economic Powerhouse:
The Evolution of Multinational Corporations 41
4 Heterogeneity: The Many Kinds of Foreign Direct
Investment and Multinational Corporations and
Their Disparate Effects 62
5 Perceptions and Economic Ideologies 93
Part II The Strategy of Multinationals
6 Why Companies Invest Overseas 117
7 Where Multinational Corporations Invest and
Don’t Invest and Why 148
Part III Impact on the International Order
8 Effects of Foreign Direct Investment on Less Developed
Countries: Vagaries, Variables, Negatives, and Positives 179
9 Why and How Multinational Corporations Have
Altered International Trade 205
10 Multinational Corporations versus the Nation-State:
Has Sovereignty Been Outsourced? 233
11 The International Regulation of Multinational Corporations:
Why There Is No Multilateral Foreign Direct
Investment Regime 252
Part IV Three Bottom Lines
12 The Case for Foreign Direct Investment and
Multinational Corporations 283
13 The Case against Foreign Direct Investment and
Multinational Corporations 308
14 An Agnostic Conclusion: ‘‘It Depends’’ 332
Part V Recommendations
15 An Agenda for Future Action 355
Index 365