Social Scientist. v 18, no. 200-01 (Jan-Feb 1990) p. 55.


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NOTE / SWAPNA BANERJEE-GUHA^

Spatial Spread of Multinational Corporations in Developing Countries and Some Related Aspects

INTRODUCTION

The recent decade has been seen fundamental changes in the world economy and the process of economic development of regions. These changes are associated with the new international economic order and the extensive spatial spread of international capital leading to considerable restructuration of the economy in different parts of the world. These have posed a major challenge to researchers in social sciences in understanding the organisation and reorganisation of the space and economy in the present era.

The structure of relations between countries and inflow of international capital is interpreted in traditional economic analysis as basically one involving a harmony of interests .It is viewed that mutual benefits can arise from the promotion of new economic activities induced by the flow of factors of production, goods and services across national boundaries.

Different conclusions are reached if economic analysis objectively focuses on imperfect world markets, distortions induced by government policies, concentration of resources and unequal exchange between and within the countries. It can also take into consideration the effects of international capital on the political composition and development objectives of the host economies, the resulting income distribution and the resultant uneven development in economy and space, inducement of particular consumption patterns and the displacement of domestically controlled economic activities allied with the limits put on economic and political self reliance.

In the post war era two phases of direct investment activity were distinguished. During the *50s and '60s the expanded presence and politico-economic power of the United States in the world scene led to an increase of U.S. private investment in areas that were almost exclusively under European or Japanese influences. By the late '60s and early 70s with the recovery from the war and expansion of economies,

* Lecturer/ Department of Geography, University of Bombay, Bombay.



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