Transnational corporations, technology and economic development: backward linkages and knowledge transfer in South-East Asia
In: New horizons in international business
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In: New horizons in international business
World Affairs Online
In: The European journal of development research, Band 24, Heft 1, S. 20-25
ISSN: 1743-9728
In: Multinational business review, Band 23, Heft 1, S. 67-76
ISSN: 2054-1686
Purpose
– The purpose of this paper is to show how the nature of the activities conducted by multinational enterprises globally and the governance modes are changing. Essentially, multinational enterprises (MNEs) structure and organize their activities in a more complex, fragmented and geographically dispersed manner. In this paper, the authors suggest that the evolution of MNEs and the rising importance of global value chains (GVCs) require a refinement of FDI motivations rather than a drastic change in the existing categories. The authors begin with a historical overview of evolving firms' international strategies and FDI motivations, before developing arguments to support the view that the fine slicing of economic activities on a global scale, and the combination of governance modalities ought to be integrated into the presentation of investment motivations. The discussion ends with implications for governments and policymaking.
Design/methodology/approach
– This paper is a conceptual paper.
Findings
– Key suggestions to refine the presentation of investment motivations are presented, together with policy recommendations.
Originality/value
– This paper provides a novel approach to ways of refining investment motivations by integrating GVC considerations, and drawing policy implications from this process.
In: East Asia: an international quarterly, Band 23, Heft 4, S. 3-21
ISSN: 1874-6284
In: East Asia: an international quarterly, Band 23, Heft 4, S. 3-21
ISSN: 1096-6838
World Affairs Online
In: World development: the multi-disciplinary international journal devoted to the study and promotion of world development, Band 40, Heft 4, S. 796-807
In: World development: the multi-disciplinary international journal devoted to the study and promotion of world development, Band 40, Heft 11, S. 2206-2220
In: Giroud , A , Jindra , B & Marek , P 2012 , ' Heterogeneous FDI in Transition Economies - A Novel Approach to Assess the Developmental Impact of Backward Linkages ' World Development , vol 40 , no. 11 , pp. 2206-2220 . DOI:10.1016/j.worlddev.2012.03.018
Traditional models of technology transfer via FDI rely upon technology gap and absorptive capacity arguments to explain host economies' potential to benefit from technological spillovers. This paper emphasizes foreign affiliates' technological heterogeneity. We apply a novel approach differentiating extent and intensity of backward linkages between foreign affiliates and local suppliers. We use survey data on 809 foreign affiliates in five transition economies. Our evidence shows that foreign affiliates' technological capability, embeddedness and autonomy are positively related to knowledge transfer via backward linkages. In contrast to what is widely assumed, we find a non-linear relationship between extent of local sourcing and knowledge transfer to domestic suppliers. © 2012.
BASE
In: RoutledgeCurzon international business in Asia series v. 2
In: Multinational business review, Band 30, Heft 4, S. 573-598
ISSN: 2054-1686
Purpose
International business theory suggests that multinational enterprises (MNEs) seek to internalise resources embedded in local firms to complement their own through inter-organisational relationships, yet little is known about whether and how these business linkages differ between foreign (F)MNEs and domestic (D)MNEs. This paper aims to explore the linkage differential between DMNEs and FMNEs operating in the same single-country contexts and to examine whether foreignness, regional origin and technological capability make a difference.
Design/methodology/approach
This study is based on a unique firm-level data set of 292 MNEs located in five advanced, small open economies (SMOPECs). This study analyses the benefit received – in the form of technical and organisational resources and knowledge – by DMNEs and FMNEs via backward, forward and collaborative linkages with local business partners.
Findings
Our research finds FMNEs benefit less from linkages than DMNEs; and FMNEs originating from outside the region especially so. However, the results also show technological capability mitigates this difference and is thus a game changer for FMNEs from outside the region.
Originality/value
This paper differentiates between FMNEs and DMNEs in their propensity to benefit from resources received from different local partners and explores the influence of regional origin and technological capability. Despite the advanced and internationally oriented nature of SMOPECs, DMNEs still gain more benefit, suggesting either liabilities of foreignness and outsidership persist, or FMNEs do not desire, need or nurture local linkages.
In: The service industries journal, Band 32, Heft 10, S. 1691-1705
ISSN: 1743-9507
In: European business review, Band 24, Heft 4, S. 351-373
ISSN: 1758-7107
PurposeThe purpose of this study is to provide a theoretical driven model, explaining the interaction between psychic distance and environment on increased (subsequent) resource commitment decisions made by firms in their internationalization process. Increasingly, contrary to the Uppsala internationalization process (IP) model, firms are engaging in direct investment, rather than exporting as an initial step into overseas markets. Yet, it remains unclear how psychic distance affects firms engaged in increased resource commitment, especially in the initial phase of their international expansion when uncertainty is higher.Design/methodology/approachBuilding theory by integrating two key theories of internationalisation (IP model and eclectic paradigm), the paper explains increased resource commitment. Comparing firm types, the study also fills the research gap of recognising multinational enterprises (MNEs) as heterogeneous in their internationalization experience. Psychic distance and environment are analysed across three groups of firms (born‐global, recent and older entrants) to observe the moderating effects of firm experience and related uncertainty. A model and propositions of the relationships between psychic distance and environment, providing an increased commitment perspective, are presented.FindingsThere are mixed responses to the three groups of firms for psychic distance factors (political, geographic, social, information and commercial and economic development); and environmental factors (near‐market effects and sunk costs). Surprisingly born‐global and recent entrants are less affected by psychic distance, and more influenced by external factors, but for different reasons, in making early increased resource commitment decisions in the host market, than are older entrants.Practical implicationsFirms need to consider the strategic objectives of the parent company, psychic distance, local environment and international experience when engaging in increase resource commitment in host economies.Originality/valueThe paper provides theoretical insights and practical implications for those involved in international business and marketing.
In: Asia Pacific business review, Band 15, Heft 4, S. 527-545
ISSN: 1743-792X
In: Giroud , A , Ha , Y J , Yamin , M & Ghauri , P 2012 , ' Innovation policy, competence creation and innovation performance of foreign subsidiaries: The case of South Korea ' Asian Business and Management , vol 11 , no. 1 , pp. 56-78 . DOI:10.1057/abm.2011.27
The aim of this contribution is to assess the impact of innovation policy on foreign subsidiaries innovation performance. The South Korean government has implemented a series of policies to enhance the innovation capabilities of private firms, whether foreign or locally owned. With more FDI in the country, the position of foreign subsidiaries as main actors for innovation is important. Yet the specific role of South Korean innovation policies in facilitating and promoting innovation by foreign subsidiaries remains under-studied. Further, the literature suggests that a subsidiary's innovation activities depend upon its strategic mandate. This article's fundamental contribution, therefore, is to analyse the influence of innovation policies and strategic mandates on the innovation performance of foreign subsidiaries. Using data from the Korean Innovation Survey, a series of models are constructed explaining the innovation performance of 423 foreign firms in the Korean manufacturing sector. Results suggest that subsidiary innovation is primarily explained by its strategic role, and competence-creating subsidiaries demonstrate higher levels of innovation performance. Innovation policy is found to influence more positively less innovative firms. Two types of policy are found to have a significant effect, namely technical support and tax incentives. © 2012 Macmillan Publishers Ltd.
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