Management of Direct investments in less Developed countries

This study is one of these report compiled on behalf of the International Dank for Reconstruction and Development in Washington, and is concerned with managerial experience in the case of Danch, French and Belgian invest ments shroud, pertieslarly in areas still in the early stages of economie development.

This problem has, in its general aspects, so far received relatively little attention, and our thanks are dee in the first place to the International Bank for Reconstruction and Development whose kind permission enabled this work to be made available to a wider public.

The theories of Schumpeter as developed in his Theorie der wirtschaftlicher Entwicklung, and of Knight in his Risk, Uncertainty and Profit form the basis for the ideas developed in the main body of the text. These theories have been elaborated and extended in the direction of business economics in Appendix L

The material from which this study is compiled derives from various sources. It is partly based on the experience of the leader of this research. the director-secretary of our Foundation Professor J. F. Haccou, who also bears the responsibility for the report. Partly the material was supplied by a large number of interviews in the Netherlands, France and Belgium as well as by the Foundation's own research. The report also incorporates the results of an enquiry made, for the purpose of verifying the theories under lying this report, among enterprises in the Netherlands containing foreign investments.

Appendix Il contains a few illustrations of the developments which have taken place as a result of Dutch, French and Belgian investments. Some new data concerning the former Netherlands Indies, the present Indonesia, have also been included. These data have been collected by the Foundation and they concern, firstly, the phenomenon of managements established in coun tries other than that in which the plant is operating - a phenomenon which can also be observed, at least in its basic principles, in the case of French, Belgian and other foreign investments - and, secondly, the degree of concen tration in these managements.

From the data accumulated it has been possible to compile a report which is both general in character and yet treats of special aspects of managerial experience in one of the countries concerned.