ABSTRACT
At the international level, liberalization requires further mobility of technology and labour than is currently available across countries. Apart from the international movements of factors of production, this paper argues that the culture of liberalization needs to be complemented by a competition culture able to tackle both the firm and the consumer view. We start with definitions of Foreign Direct Investment (FDI) and contestability. Constraints on FDI and competition policy are then examined. We stress that, to optimize the benefits of FDI, critical variables should be taken into account. Finally, we conclude by stating that there is no either/or between markets and State intervention.
KEYWORDS:
International capital flows; foreign direct investment; competition; interventionism