short-run, N.D.C. itself make large profits. This is illustrated in the
table below:
TABLE 6 — YIELD* ON U.S. DIRECT INVESTMENT IN AFRICA

BY SECTORS
A 1964 1968
o % %
Mining, smelting 10.0 173
Petroleum 32.3 40.4
Manufacturing 24.3 11.3
All sectors 24.1 29.1

*Yield: Earnings for a given year as percentage of value of total direct foreign in-
vestment at beginning of year.

Source: Adapted from B. Hawaryshyn, ‘The Internationalization of firm,” JWTL,
Vol. 5, NO. 1 (1971), Table 4, p. 79.

There are many ways by which association with foreign private
Capital leads to investment decisions by the public corporations
resulting in the pattern we have described above. Some of the
more important of these are:

(1) THE CONTROL BY THE ENTERPRISE OF THE MANAGING
AGENTS.

The managing agents not only make day-to-day decisions but
also exert decisive influence on the Board of Directors. It is they
who advise, produce board papers and generally argue out the
case for a particular investment. The director-representative of a
public corporation — who may be representing his corporation on
several boards — has neither the time nor the expertise to argue
successfully against this, (And in any case, in the absence of any
overall strategy, the assumptions of the local director are unlikely
to be very different from those of the foreign partner). Besides,
being the supplier of machinery or raw materials, patent or trade
marks, or a marketing agent and probably a substantial lender as
well, the foreign partner is in an overwhelmingly strong
bargaining position.

(2) INITIATION OF PROJECTS.
In many cases the original ideas for a particular project in fact
come from a potential foreign partner. It is not uncommon that an

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