Multinational corporations are probably among the most powerful economic institutions of all time. They not only have production facilities in multiple countries but also look beyond their own domestic markets for opportunities.

They scan the globe to expand their operations. Multinational corporations are not longer the monopoly of the United States, western Europe, and Japan; many developing countries have growing amount of foreign direct investments.

Foreign direct investments are sought by nations and firms alike. Nations are looking to foreign direct investment for economic development and employment, firms for new markets, resources, and increased efficiency. The relationship among entities involved-the firm, the host government, and the home government – have to be managed to attain each benefit. The critical role of foreign direct investment is technology transfer, which means the transfer of a combination of hardware, software, and skills for production process.

Foreign direct investments are sought by nations and firms alike. Nations are looking to foreign direct investment for economic development and employment, firms for new markets, resources, and increased efficiency. The relationship among entities involved-the firm, the host government, and the home government – have to be managed to attain each benefit. The critical role of foreign direct investment is technology transfer, which means the transfer of a combination of hardware, software, and skills for production process.