Abstract:In order to adapt themselves to the changes of international b usiness environments and market conditions, transnational corporations have to reconfigu re the structure of foreign investment. Divesting or decreasing investment in ex isting host country is an integral part of transnational corporations' global st rategies, just like maintaining or increasing investment in another one. The tim ely strategy of divestment may help the divestor optimize resource allocations a nd restore or strengthen the competitive advantages. The authors analyze and exp ound international corporate divestment theory and its latest development.