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Multinationals and Developing Countries

. . psychological dependence leads to an ever growing economic and cultural dependence on the outside world" (p. 123).

Vernon (1984) contended that economic growth in developing countries depends on the availability of several resourcesproductive facilities, skilled labor, materials, effective organizations, and capital. He further contended that the MNC, if not the only source of most of these resources in the quality and quantity required by developing countries, is, most certainly, the most efficient source. He contended that foreign capital is the "engine of growth" for the developing country, and that only the MNC with a profit incentive is likely to provide such capital. Vernon saw no evils in the activities of MNCs. Supporting this perspective, a Brookings Institution study (Bergsten, Horst, & Moran, 1983, p. 355), said that: Traditional theory posits that foreign direct investment contributes positively to development. It brings those societies most in need of them capital, technology, and management and marketing skills. In addition to the direct income effects, jobs are created and government tax revenues, which can be used for further development, are augmented.


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Multinationals and Developing Countries. (2000, January 01). In Retrieved 12:45, October 25, 2014, from
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