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AROUND the world, multinational corporations are being courted as never before.

In the 1970s, India drove out companies such as Coca-Cola and IBM with its tough policies on foreign investment. Now, with reforms of such policies, India is luring those companies back.

Russia has seen 9,000 companies with foreign ties spring up since communism's fall in 1991.

China has been most successful of all, attracting foreign investment at a torrid pace as it has moved to open its economy in the 1990s ($34 billion in 1994 alone). Not far from Beijing's Tiananmen Square, an enormous office and shopping complex planned by a Hong Kong tycoon is getting back on track. Called Oriental Plaza, it stalled in 1994 as China imposed austerity measures to quiet spiraling inflation.

Attitudes toward multinationals have changed dramatically.

For years, many people considered such companies a colonial invasion that endangered national sovereignty.

''Twenty years ago, transnational corporations were part of the problem,'' says Karl Sauvant, a United Nations economist in Geneva. ''Today they are part of the solution. All countries are trying to attract transnational corporations'' as a way to speed economic development.

Now, from Mexico to Malaysia, nations are rolling out the welcome mat for global companies in the countries' quest for rapid growth. A multinational or transnational corporation is one that has operations outside its home country.

Since 1990, flows of foreign investment - typically coming from multinational firms - have become the largest source of outside financing for developing countries - outpacing foreign aid and securities investment. Unlike portfolio investment, direct investment in plants can't be taken out of a country easily or quickly.

Factors such as falling trade barriers, slowing inflation, and the end of Communist rule have helped propel foreign investment flows.

But the shift in attitudes is partly driven from the bottom up. When citizens in poorer nations watch television, they see visions of opulence.

''People know that they are living like pigs,'' says Robert Lipsey, an economist with the National Bureau of Economic Research in New York. They want to join the modern world, even if it means inviting in foreign trade and investment. ''Envy is a very powerful force,'' he adds.

Third-world multinationals

But developing nations aren't merely targets of investment; they are becoming home bases for their own multinationals. (See chart, below.) Cementos Mexicanos (Cemex), based in Monterrery, Mexico, has grown into the world's fourth-largest cement producer.

Emerging-market companies are going global at a stunning rate. Direct-investment outflows from developing countries were 5 percent of the world total from 1980-1984, 10 percent from 1990-1994, and 15 percent in 1994 alone, according to the World Investment Report 1995, prepared under Mr. Sauvant for the United Nations Conference on Trade and Development.

The rapid industrialization of Asian ''tigers'' like South Korea, Taiwan, Singapore, and Hong Kong has become a model for many nations.

''Capital is recognized as a scarce resource that no country can afford to drive away,'' Sir Leon Brittan, vice president of the European Commission, said in a 1995 speech.

Corralling capital

''The issue of foreign investment has been largely divested of the [negative] ideological overtones of the 1960s,'' Mr. Brittan added. ''Investment is recognized for what it is: a source of extra capital, a contribution to a healthy external balance, a basis for increased productivity, additional employment, effective competition, rational production, technology transfer, and a source of managerial know-how.''

How significant is the rise of global corporations? Consider a few barometers from UN economists and others:

* The foreign affiliates of 40,000 multinationals account for more than $5 trillion in sales, or roughly 20 percent of the world's $25 trillion economy.

* About one-third of the world's $5 trillion trade in goods and services occurs within multinationals - from one branch to another. Trade between different multinationals accounts for another third of world trade.

* New foreign direct investment amounted to about $230 billion last year, up slightly from 1994. (FDI is investment in land, plant, equipment, and offices - not paper investments, such as stocks and bonds.) During the 1980s, FDI grew about 30 percent annually, much faster than trade or economic output.

Still, multinationals face problems. Many countries want a measure of control over projects, for one thing.

Recently, opponents of the current reforms in India tried to close new Kentucky Fried Chicken restaurants in New Delhi and Bangalore.

Enron's frustration

Also in India, Enron Corp., based in Houston, ran into a jungle of delays over a $2.5 billion natural-gas power plant contract.

India's single largest foreign-investment project, the deal with Enron and two United States partners, is finally back on track, but only after the firms agreed in January to lower the project's cost.

The months-long rift between Enron and the Maharashtra state government raised doubts about India's friendliness to investors.

India's Finance Ministry acknowledged this problem in a Feb. 27 report. Looking at China's success, the ministry said India ''should not feel insecure about using foreign investments to augment the growth of output and jobs in our country,''

But many Indians soured on the Enron project. Meena Dalvi, a homemaker in Bombay, asks, ''What's the point of putting up an expensive new project unless the existing plants are made to run efficiently?'' The first priority, she contends, should be to better manage the state-owned utilities that will buy power from Enron.

Even in China, moves to lure foreign investment are hurt by red tape and other policies.

The development, planned by Hong Kong magnate Li Ka-shing, screeched to a halt in 1994 when the Chinese government imposed austerity measures, including a credit squeeze and curb on property speculation.

The revival of Oriental Plaza signals China is still courting foreign investment, though more selectively and at a slower pace than in recent years. The frenzy over China's booming billion-person market reached a peak in 1993, when foreign firms pledged almost 10 times as much investment as in 1991.

Though money continues to flow into China, the lack of legal protections and some costly contractual disputes have made foreign businessmen wary. Also overshadowing China's investment picture are political uncertainty over leadership succession to Deng Xiaoping and rising tensions with rival Taiwan.

Russia, too, has foreign investors worried.

Still, Russia and other former communist nations, in their shift toward free-market economics, have followed the global trend of attracting investment.

Parliament has passed reams of legislation in the past two years to fill the legal vacuum in the field, and most of its laws ''are generally steps in the right direction,'' says Tom Dvorzhak, an American lawyer who advises multinational firms and other potential investors.

Nonetheless, total FDI in Russia since 1991 is running at around $6.5 billion, a tiny fraction of what China has attracted and well below even relative economic minnows such as Poland and Hungary.

For Brazil, benefits of tackling inflation

If communism's fall has drawn investors to the former East bloc, falling inflation is luring them to Brazil. Multinational companies are entering Latin America's biggest consumer market at a record pace. President Fernando Henrique Cardoso's 1994 economic stability program cut hyperinflation and continued trade-liberalization policies begun in the 1990s.

In electronics, the Korean giant Samsung recently inaugurated a $60 million factory to assemble televisions and VCRs. Motorola will invest $30 million to produce portable phones and pagers and Compaq recently opened a new factory that will produce 400,000 personal computers a year. About 38 percent of all foreign investment has come to the booming the auto industry.

Brazil and other emerging economies, meanwhile, are rapidly developing their own home-grown multinationals.

Cemex, the Mexican cement producer, operates in 22 countries and is recognized as one of the most efficient firms in the industry. Sales doubled from 1990 to 1994 to 10.6 billion pesos, and jumped another 25 percent to 13.6 billion pesos in the first nine months of 1995.

''It went against the established rules'' for a Mexican company to rise over a matter of years to rival the Swiss, French, and Italian cement-producing giants by taking hefty market shares on their own turf in developed-world markets, says Gustavo Caballero, finance and planning director for Cemex.

Cemex began its international trajectory in the early 1990s, only after the company became convinced Mexico was serious about joining the global economy. As Chairman Lorenzo Zambrano figured, it was buy big, buy globally, or be bought. Cemex has since made a name for itself by buying struggling and inefficient plants in various countries and turning them around - a talent usually associated with sleek developed-world multinationals.

Expansion began into the US South and Southwest, and then into Spain - which shocked European competitors. But after establishing a toehold in industrial nations, Cemex quickly decided to focus on emerging markets, primarily Latin America and Southeast Asia.

Though developing-nation multinationals are rising fast, the top-100 list is still dominated by the US and Japan. The US is the biggest recipient of Foreign direct investment as well as the biggest source of flows.

Japan, meanwhile, has been pushing into Asia is part of a third wave of offshore investment. The first came in the 1970s. The current wave and one in the '80s were fueled in part by the strength of the yen.

Japanese multinationals attract criticism, however, for not promoting local workers into management and for a perceived reluctance to transfer technology.

''Japanese companies are still at a loss as to how to deal with local employees,'' says Shigeto Sonoda, a sociologist at Chuo University in Tokyo who studies the experience of Japanese corporations in China.

Kunio Igusa, an economist at Tokyo's government-funded Institute of Developing Economies says Japanese companies do transfer important know-how. They train their employees to improve processes and ensure that quality is maintained. ''In that sense, technology is transferred person-to-person.''

Africa - last to catch wave?

In the developing world, Asia clearly has the hottest markets, with Latin America also catching fire.

Africa, by contrast, is generally seen as risky for investors, though some analysts see long-term potential. The bright spot of late has been South Africa, where foreign firms are streaming in, their confidence bolstered by successful democratic elections in 1994. Elsewhere in Africa, wars, political instability, poverty, and poor infrastructure require an intrepid attitude.

Still, the continent is luring investors for its commodities and mineral wealth. For instance, excluding South Africa, mining exploration spending jumped 60 percent on the continent last year, to $320 million, says Lloyd Pengilly, president of Fleming Martin Securities.

What does the future hold for multinationals? That depends in part on the investment ground rules developed among nations.

Ground rules changing

The growing importance of international investment has been recognized by the multiplication of bilateral investment treaties between nations to regulate the terms of this business. Both sides want fair treatment. UN economists count 900 such treaties as of mid-1995, some 60 percent of them since 1990. These govern issues such as protection of intellectual property (copyrights, patents), investment licenses, and capital repatriation.

The club of the industrial nations, the Organization for Economic Cooperation and Development in Paris, has for a few years been working on a code of international investment with a dispute-settlement procedure and enforcement mechanism that would be open to the signatures of developing countries as well. The hope is for a deal next year. There is talk of the World Trade Organization also taking further steps in managing world investment.

In the meantime, many nations have moved on their own. Between 1991 and 1994, 368 out of 373 changes in national laws and regulations concerning foreign direct investment were in the direction of liberalization.

Sauvant is concerned that the developing nations are offering more and more costly incentives to attract foreign investment, and that these can lead to ''waste and economic distortion.'' His report on multinational investments proposes that an international group of ''eminent persons'' be created to hold hearings on these incentives, with participation of the private sector as well and national and international institutions. He hopes the idea will be taken up at the next meeting of the UN Committee on Trade and Development in Johannesburg, South Africa, April 27-May 11.