World Investment Report 1995

Transnational Corporations and Competitiveness

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This fifth edition of the World Investment Report (WIR) documents the continuing growth of foreign direct investment (FDI) in developing countries. It analyzes the impact of FDI on the competitiveness of both developed and developing countries. The Report also discusses the policy implications for the enabling environment to promote inward as well as outward FDI and the key issues to be taken into account in multilateral negotiations. For the first time, WIR indexes transnationality that takes into account the respective shares of foreign assets, foreign sales and foreign employment of TNCs.




Enabled by increasingly liberal policy frameworks, made possible by technological advances, and driven by competition, globalization more and more shapes today’s world economy. Foreign direct investment (FDI) by transnational corporations (TNCs) now plays a major role in linking many national economies, building an integrated international production system — the productive core of the globalizing world economy. Transnational corporations deploy their tangible and intangible assets (capital, research-and-dcvelopment capacity and technology, organizational and managerial practices, trade links), with a view towards increasing their competitiveness and profitability. At the same time, the deployment of these assets by firms strengthens the resource base of countries and their capacity to produce, to reach and expand markets for their products and to restructure their economies - in brief, to improve their overall economic performance. To link the increased competitiveness of TNCs to the economic performance of host and home countries as closely as possible poses a challenge for policy makers. These developments and issues arc the particular theme of the World Investment Report 1995.


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