The Background to the Sample Firms and Government Policies

In this part of the book we shall deal with the methods used in, and the main findings of, empirical studies of the balance-of-payments and income effects of particular foreign investments in the manufacturing sectors of six less-developed countries: Jamaica, Kenya, India, Iran, Colombia and Malaysia. These studies were undertaken on behalf of the UNCTAD secretariat, and were conducted in three stages, covering two countries at a time, with the respective reports being circulated by UNCTAD over a period of three years (1970–3). The present chapter briefly describes the conduct of the research, the nature of the firms in the sample and the general policies pursued by the host governments with respect to foreign investment. Chapter 6 presents some data on the financial structure, profitability and performance of the sample firms. Chapter 7 gives the ‘direct’ balance-of-payments effects. The tools used to evaluate the ‘total’ balance-of-payments and ‘social’ income effects of these firms are discussed in Chapter 8, and the results obtained in Chapter 9. In Chapter 10 the merits and weaknesses of the approach used in trying to quantify the ‘social’ effects of foreign investments are assessed.