World Investment Report 1997

Transnational Corporations, Market Structure and Competition Policy

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A vital source on the role of Foreign Direct Investment (FDI) in the world economy, this Report provides a comprehensive analysis and policy discussion of international investment issues. It examines current trends in global, regional and national FDI flows; the impact of FDI on market structure and competition in host economies, as well as globally; and the latest trends in investment liberalization, including interlinkages with foreign portfolio equity investment. The Report also includes a statistical annex.




Foreign direct investment (FDI) continues to be a driving force of the globalization process that characterizes the modern world economy. The current boom in FDI flows, which has been accompanied by increasing flows of foreign portfolio equity investments, underscores the increasingly important role played by transnational corporations (TNCs) in both developed and developing countries. This role has been facilitated by the liberalization of FDI policies that has taken place in many countries in recent years, as part of an overall movement towards more open and marketfriendly policies. However, reaping the benefits of FDI liberalization requires not only that barriers to FDI are reduced and standards of treatment established -- the focus of most FDI liberalization to date -- but also that competition in markets is maintained. This third component of FDI liberalization -- maintaining the proper functioning of markets in which TNCs invest -- is the special topic of this year’s World Investment Report, which examines the interaction between FDI, market structure and competition, and looks at policy implications.


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