Scott, Gerald E.

Roymond Vernon (1966) and Seev Hirsch (1967) systematically put forth the product cycle approach in an effort to increase understanding of trade theory and introduce dynamics into trade. One of the model's major premises is that a country which has a strong competitive position in a particular industry at a given point in time may well lose this position when the industry enters into a new phase. This approach has been accepted as an established theory though it still remains inadequately tested. The television industry is the largest segment of the consumer electronics industry which has been frequently cited as an evidence to support the product cycle theory. The whole life of monochrome television in the United States was nicely explained by the product cycle theory. But it seems that the development of color television does not tell the same story.

Balance of payments theories have been developed to examine the impact of various factors in a nation's payments position. This thesis sets out to investigate the impact of currency devaluation in small LDC nations, particularly the Gambia. The Gambia has been struggling with balance of payment deficits brought about by many factors, amongst which external debt service payments have played a very significant role. The models recommended by the various theories are very closely examined in this endeavour followed by an empirical analysis to specifically determine the exact nature of the impact of currency devaluation to the economy of the Gambia.

This thesis theoretically and empirically analyzes the effects of Foreign Direct Investment on Third World countries. The competing theories of the impact of FDI on developing countries are examined. The contradictory results of former econometric tests and empirical surveys measuring the impact of FDI on growth are compared and contrasted. A human development accounting model is employed as a new approach to study the effects of FDI on social indicators. Finally the resulting policy implications are discussed.