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What Is The Radical View Of The Foreign Direct Investment?

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Nouman Umar Profile
Nouman Umar answered
The radical view traces its roots to Marxist political and economic theory. Radical writers argue that the multinational enterprise is an instrument of imperialist's domination. They think that the multinational companies used host countries just for their sake and they do not want to provide any benefit to the host countries. They see the multinational enterprise as a tool for exploiting host countries to the exclusive benefit their capitalist imperialist home countries.

They argue that Multinationals Enterprise extract profits from the host country and take them to their home country giving nothing of the value in the host country in exchange. They note for example that key technology is rightly controlled by the Multinational enterprise and that important jobs in the foreign subsidiaries of multinational organizations go to home country nationals rather than to citizens of the host country.

Because of this according to the radical view foreign direct investment by the multinationals of advanced capitalist's nations keeps the less developed countries of the world relatively backward and dependent on advanced capitalist nations for investments, jobs and technology. Thus according to the extreme version of this view no country should ever permit foreign corporations to undertake foreign direct investment since they can never be instruments of economic development and only of economic domination. Where multinational companies exist in a country they should be immediately nationalized. By the end of the 1980s the radical position was in retreat almost everywhere.
Anonymous Profile
Anonymous answered

It is an instrument of imperialist domination.From 1945 until the 1980s

Reasons of retreat are

*The collapse of communism in Eastern Europe
*The abysmal economic performance of those countries that embraced the Radical View
*The strong economic performance of those developing countries that embraced capitalism rather than the radical view

Robert Lamp Profile
Robert Lamp answered

They argue that the multinational enterprise (MNE) is an instrument of imperialistdomination. MNEs extract profits from the host country and take them to theirhome country, giving nothing of value to the host country in exchange. Accordingto radical view, FDI by the MNEs of advanced capitalist nations keep the lessdeveloped countries of the world relatively backward and dependent on capitalistnations for investment, jobs, and technology. No country should ever permitforeign corporations to undertake FDI.

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