Foreign direct investment is increasingly becoming an important source of investment funds in developing countries. Many economists have hailed it as an important source of new technology and management know-how and a useful link to world markets (see, for example, Balasubramanyam, Salisu and Sapsford, 1996; Fry, 1993). On the other hand, some concerns have also been voiced in developing countries about whether the multinational firms might have an adverse effect on the development of domestic firms, or otherwise be a source of economic exploitation of developing countries.