titors and regulators. in reviewing "The history of MNE activities in Latin America" in Chapter One Grosse observes that the foreign direct investment (FDI) has served as the "major form of MNE business" (7). After the colonization period in Latin America ended roughly in the 1820s, the earliest major form of long-term capital flow was issued by Latin American governments who in turn were financed to the value of $20 million by British merchant banks (7).
The bargaining theory which Grosse relies upon in Chapter Two appears to be an adaptation of the earlier model developed by Gladwin and Walter in 1980. Elementally understood, the MNE is to be regarded as one of several competing actors in economic and political power in any country. A firm's status at any given time can be determined by its ability to bargain with other actors for resources and a political base (2). Grosse indicates that the theory of MNE operations has intensified over the last 30 years as "large raw materials, manufacturing, and service countries" affiliated with several different companies have begun recently important upon the international business scene (31). During this time period, international business practices have shifted toward increased FDI and its consequent production while more highly valuing manufactured goods and petroleum products. During the inflationary 70s Latin American trade grew dramatically. Latin American governments encouraged an inward looking development strategies leading to a nationalization of natural-resource industries (31).
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