Targeting Winners: Can Foreign Direct Investment Policy Help Developing Countries Industrialise?

The globalisation process provides opportunities for developing countries in the context of tighter international agreements that limit their policy instruments for promoting industrialisation. An option for governments in this new context is to 'target lead transnational corporations', whose corporate strategies are more attuned to their developmental circumstances and industrial aspirations, in order to locate nodules of their international systems of integrated production in their economy. This can have a clustering effect in the same host economy that can contribute significantly to the creation and consolidation of internationally competitive industries there. Here we examine the cases of two developing countries: one that achieved impressive results by following such a policy and another that missed a golden opportunity by not doing so. [ABSTRACT FROM AUTHOR]