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Performance criteria stipulated by host countries (English)

One of the issues identified by the task force as requiring further study is the stipulation of performance criteria by host countries on foreign firms investing in them. Such criteria constitute an aspect of host country regulation of foreign investment in the context of the macro objectives of their national economic policies which aim at augmenting national output and employment and attaining viability in balance of payments. Host countries naturally seek to weigh the benefits of additional income generation arising out of the foreign investment against its likely impact on balance of payments or on the growth of domestic (indigenous) industry so as to maximize what they regard the positive and minimize the negative aspects of foreign investment. This paper focuses attention on the two most widely stipulated forms of regulation. These require: (i) that firms shift procurement of inputs to host countries as against importing such inputs; and (ii) that they export a specified percentage of production either by volume or value.

Details

  • Author

    Narasimham,M.

  • Document Date

    1981/01/08

  • Document Type

    Board Report

  • Report Number

    101653

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    World,

  • Region

    The World Region,

  • Disclosure Date

    2015/12/04

  • Disclosure Status

    Disclosed

  • Doc Name

    Performance criteria stipulated by host countries

  • Keywords

    private foreign investment;international division of labor;access to international market;economic and social policy;foreign exchange;balance of payment;foreign investor;net capital outflow;performance criteria;domestic economic activity;foreign private enterprise;transfer of technology;international trade flows;foreign exchange balance;code of conduct;foreign investment policy;foreign equity ownership;foreign exchange position;export oriented production;natural material resources;foreign private capital;quantitative import restriction;country of origin;return on investment;form of investment;quality and standards;lack of infrastructure;economic development board;payment of royalty;share of output;acquisition of technology;types of service;lack of security;internal trade flows;host developing country;import substitution effect;free trade zone;foreign capital flow;private investment flows;real private investment;host country regulation;direct foreign investment;raw material;foreign company;transfer pricing;domestic industry;import substitute;Extractive Industry;Economic Policy;labour intensive;national output;local value;performance requirement;recipient countries;Industrial Policy;Industrial Policies;domestic production;domestic enterprise;local input;domestic input;direct investment;home countries;home country;local enterprise;core sector;large business;export performance;conflict situation;protective action;international consensus;global market;comparative advantage;domestic employment;employment opportunities;brand name;domestic consumer;indigenous industry;income generation;resource base;industrial investment;Market Dominance;foreign ownership;export earning;export earnings;retained earnings;licensing policy;goods manufacture;advanced technology;oil sector;primary sector;foreign participation;export market;employment opportunity;substantial variation;Technology Transfer;investment approvals;investment sector;business monitor;long-term loan;investment opportunities;investment finance;banking sector;industrial country;geographical distribution;geographical spread;majority ownership;small industry;marketing skills;production sharing;long-term agreement;financial participation;university graduate;local production;money market;manufacturing sector;restrictive regulation;monopoly rent;oil discovery;Natural Resources;oligopolistic rents;foreign subsidiary;cost structure;consumer good;consumer goods;trade mark;entry criterion;political risk;portfolio investment;credit operation;geographical concentration;financial relations;market condition;market domination;national economy;foreign partner;cost benefit;Trade Policies;Trade Policy;export sector;export base;geographical area;capital good;national policy;world production;qualitative goals;technology export;specific regulation;pharmaceutical sector;buy-back arrangement;local technology;foreign technology;price competitiveness;technological capability;industrial base;domestic saving;macro economic;general observation;domestic manufacturer;sliding scale;labour force;export platform;capital transfer;binding obligation;local partner;production activity;investment fund;unfortunate consequences;foreign enterprise;foreign interest;competitive market;transfer price;domestic output;restrictive practice;private flow;clean slate;Proposed Investment;sensitive aspects;external position;exclusive access;market outlet;Basic Drugs;competitive incentive;multilateral basis;resource cost;global welfare;excessive price;production structure;investment climate;parent company;industrial sector;financial control;external source;domestic ownership;foreign debt;export orientation;profit rate;foreign component;political outlook;

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Citation

Narasimham,M.

Performance criteria stipulated by host countries (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/219421468187738573/Performance-criteria-stipulated-by-host-countries