Restrictive Business Practices, Transnational Corporations, and Development: A Survey

177 Pages·1981·5.346 MB·English

by  Frank Long (auth.)

RESTRICTIVE BUSINESS PRACTICES,
TRANSNATIONAL CORPORATIONS,
AND DEVELOPMENT
DIMENSIONS OF
INTERNATIONAL BUSINESS
Restrictive Business Practices,
Transnational Corporations,
and Development
A Survey
Frank Long
Queen Elizabeth House, Oxford
Martinus Nijhoff Publishing
Boston/The Hague/London
DISTRIBUTORS FOR NORTH AMERICA:
Martinus Nijhoff Publishing
Kluwer Boston, Inc.
190 Old Derby Street
Hingham, Massachusetts 02043, U.S.A.
DISTRIBUTORS OUTSIDE NORTH AMERICA:
Kluwer Academic Publishers Group
Distribution Centre
P.O. Box 322
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Library of Congress Cataloging in Publication Data
Long, Frank.
Restrictive business practices, transnational
corporations, and development.
(Dimensions of international business; 2)
Includes index.
1. International business enterprises. 2. Restraint
of trade. 3. Industrial concentration. 4. Under
developed areas-International business enterprises.
5. Economic development. I Title. II. Series.
HD2755.5.L66 338.8' 8 80-24652
ISBN-13: 978-94-009-8152-2 e-Book-13: 978-94-009-8150-8
DOl: 10.1007/978-94-009-8150-8
Copyright © 1981 by Martinus Nijhoff Publishing
Softcover reprint of the hardcover 1s t edition 1981
No part of this book may be reproduced in any form by print, photoprint, microfilm, or any
other means without written permission from the publisher.
To Zemen ay
CONTENTS
Acknowledgments xi
Introdnction xiii
1 THE PROBLEM 1
Definition of Terms 1
The Concepts of Oligopoly and Monopoly and Restrictive
Business Practices 2
Business Concentration and the Real World 12
Market Power and the Law 17
2 LITERATURE ON DEVELOPMENT 18
Growth and Development 18
The 1950s to the Early 1960s 19
International Aspects 24
Toward a Social Scientific Interpretation 28
Conclusion 29
vii
viii CONTENTS
3 RESTRICTIVE BUSINESS PRACTICES, TRANSNATIONAL
CORPORATIONS, AND ASPECTS OF CONTROL 30
Legislation in Selected Developed Countries 30
Legislation in Developing Countries 41
4 TRANSNATIONAL CORPORATIONS AND
DEVELOPING COUNTRIES 47
Investment Theory, International Investment,
and Transnationals 50
Transnational Corporations as Dominant-Firm Types 52
Activities of Transnational Corporations and
Developing Countries 57
Country Breakdown of Production Activities 62
Transnational Corporations and Imports 65
Transnational Corporations and Exports 70
5 RESTRICTIVE BUSINESS PRACTICES AND
TRANSNATIONAL CORPORATIONS: SOME AVAILABLE
EVIDENCE 75
Types of Restrictive Business Practices 75
Restrictive Business Practices and Transnational
Corporations: The Factual Situation 81
6 DEVELOPMENT IMPLICATIONS OF RESTRICTIVE
BUSINESS PRACTICES 101
Some Negative Aspects 102
Imports 111
Exports 115
A Summary of Development Implications 116
Other Related Aspects 118
Conclusion 122
7 POLICY ASPECTS OF RESTRICTIVE
BUSINESS PRACTICES 123
Historical Aspects 123
UNCTAD and Restrictive Business Practices 124
Other Cases 129
CONTENTS ix
Conclusions 135
Notes 137
Name Index 159
Subject Index 161
ACKNOWLEDGMENTS
This study has benefited from the comments of Professor Peter Bernholz at
the Institiit fUr Sozialwissenschaften, Basel, and an unnamed referee from
the Massachusetts Institute of Technology. It is the outcome of work on
transnational corporations and restrictive business practices that began at
the Secretariat of the United Nations Conference on Trade and Develop
ment in Geneva, in 1975. Preparation of the study was done at the Institut
fur Sozialwissenschaften and, for the greater part, at Queen Elizabeth
House, Oxford. The author alone~ears the final responsibility for whatever
shortcomings are found in the study.
xi
INTRODUCTION
Problems of development in what is normally called the Third World have
been a subject matter of concern of the social sciences, lespecially of eco
nomics, for over two decades now. Between the late 1950s and the current
1
time, as Chapter 2 attempts to show, the emphasis seems to have shifted
from purely economic considerations of underdevelopment to a paradigm
that includes other, extra-economic considerations of a social, political, and
cultural nature. The recent emergence of development studies as a new
social science discipline stems precisely from the methodological premise
that development is a complex process that can only be adequately under
stood, analyzed, and alleviated by a cross-disciplinary approach instead of a
wholly unidisciplinary one.2
We do not wish to challenge the above proposition. However, it remains
true that an assessment ofc ertain economic phenomena that pose problems
to developing countries can offer us greater insights into problems of
development, including the formulation of appropriate policies aimed at
improving socioeconomic conditions in such countries.
One such phenomenon is restrictive business practices. This study is con
cerned mainly with surveying aspects of restrictive business practices as they
relate to problems of development in the Third World. Restrictive business
xiii