(DP 1982-06) Foreign Investors from Small Countries: A Philippine Case Study

Abstract

Much of the literature on direct foreign investment is implicitly or explicitly with reference to 'large investors', both in terms of the investor's home country or of the investing company itself. It is sometimes argued, however, that foreign investors from 'small' countries differ in several significant aspects - especially regarding product and technology adaptation, and the extent of control exerted by the parent company - with potentially important policy implications. This paper examines these issues with reference to a case study of Australian investment in Philippine manufacturing. Our findings suggest that these differences may be exaggerated, although there is reason to believe that these investors have less difficulty in 'scaling down' to a small, diversified market. A fruitful topic for future research may be in the expanding area of developing country investors.