Skip to Main Content
Have library access? Log in through your library
Multinational Corporations and Local Firms in Emerging Economies

Multinational Corporations and Local Firms in Emerging Economies

Eric Rugraff
Michael W. Hansen
Series: EADI
Copyright Date: 2011
Pages: 276
  • Cite this Item
  • Book Info
    Multinational Corporations and Local Firms in Emerging Economies
    Book Description:

    Multinational Corporations and Local Firms in Emerging Economies aims at contributing to the emerging literature on multinational corporation (mnc)- local firm interfaces by providing a number of country studies from emerging economies of the spillover and linkage effects of multinational corporations on local firms. Moreover, the book takes the issue to the policy level by sharing and evaluating policy experiences from a number of countries on efforts to promote closer interaction between mncs and local firms. The country studies are placed within a framework for analyzing mnc-local firm interfaces that integrates insights from the spillover and linkage literature. The book's primary market is postgraduate students and researchers in economics, business studies, international relations, political science, development studies and area studies. However, because the book has a policy orientation, development practitioners and policy makers may also find insights and analyses that may inspire efforts to enhance spillover effects of multinational corporations in emerging economies. This title is available in the OAPEN Library -

    eISBN: 978-90-485-1386-4
    Subjects: Economics

Table of Contents

  1. Front Matter
    (pp. 1-4)
  2. Table of Contents
    (pp. 5-8)
  3. Preface
    (pp. 9-10)
    Eric Rugraff and Michael W. Hansen
  4. I Introduction

    • 1 Multinational corporations and local firms in emerging economies: An introduction
      (pp. 13-48)
      Eric Rugraff and Michael W. Hansen

      One of the most heated issues within current development debates relates to the role played by multinational corporations (MNCs) in economic development. On the one hand, MNCs may help emerging economies¹ in the modernization of their economies and industries by transferring technology, know-how and skills, by providing access to export markets, by intensifying competition, or by making available goods and services that are better and/or cheaper than those offered by local producers (De Mello, 1999; UNCTAD, 1999; JBIC Institute, 2002). On the other hand, beneficial effects are not given and MNCs may stifle economic development by locking in host economies...

  5. II Studies of spillovers and linkages between multinational corporations and local firms

    • 2 The impact of foreign direct investment in business services on the local economy: The case of Hungary
      (pp. 51-74)
      Magdolna Sass

      East Central Europe and within it Hungary are locations where, especially starting from 2000, more and more independent business services firms¹ set up their operations and many firms concentrated their regional, European or even global service center. For example, in Hungary independent firms such as EDS, SAP, GenPact, Diageo and IBM are present. As for the second group, Alcoa, Vodafone, Exxon Mobil, Avis, Cemex, GE, InBev, Morgan Stanley, Celanese, Lexmark, British Telecom, among others, relocated certain regional, European or global service functions to Hungary. Not only the number of projects grew significantly, but there were also some very big projects...

    • 3 Do multinational companies transfer technology to local small and medium-sized enterprises? The case of the Tegal metalworking industry cluster in Indonesia
      (pp. 75-100)
      Tulus Tambunan

      It is often argued that the key to increasing the competitiveness and productivity of small and medium-sized enterprises (SMEs) in developing countries is to build the capacities of these enterprises through improved technology. This technology development can take place internally (inside the firm) or can be fostered through access to outside sources, including transfer of technology from multinational companies (MNCs). Technology here is defined broadly including the product, process, as well as management skills.¹

      There is a large body of literature on technology transfer, particularly from MNCs to firms in developing countries.² However, very little work, especially empirical studies, has...

    • 4 African small and medium enterprises and the challenges in global value chains: The case of Nigerian garment enterprises
      (pp. 101-122)
      Osmund Osinachi Uzor

      The increased intensity of economic globalization supported by the fallen barriers to entry in production has pressured countries to improve their capabilities in industrial activities. The globalization process has accelerated the growth of world imports and exports as well as increased Foreign Direct Investment (FDI) across borders since the 1980s. The concept of Global Value Chains (GVCs) refers to the interrelated production activities performed by firms at different geographic locations. The interrelated activities offer opportunities for local producers to learn from the global leaders of the chains. The internal governance of the value chain significantly affects the scope of local...

    • 5 Mutual productivity spillovers and regional clusters in Eastern Europe: Some empirical evidence
      (pp. 123-152)
      Chiara Franco and Kornelia Kozovska

      It is widely accepted that foreign direct investment (FDI) is beneficial for the economic development of nations as it introduces fresh capital, new knowledge and the possibility for spillovers (technology, production, knowledge) for the host country. This has led to the wide support and progressive use of policies for the attraction of larger amounts of FDI. At the same time, the empirical literature on the likely impacts of FDI has been largely inconclusive for developing countries and transition economies (for example Aitken and Harrison, 1999; Javorcik, 2004). Some conditions that may affect the process, such as firms’ absorptive capacities or...

  6. III Policies to promote spillovers and linkages

    • 6 Scope and effectiveness of foreign direct investment policies in transition economies
      (pp. 155-180)
      Črt Kostevc, Tjaša Redek and Matija Rojec

      Basic questions related to government actions in attracting foreign direct investment (FDI) in general, and specifically actions related to spillover effects and knowledge transfer via FDI are: Is there a rationale and scope for specific FDIrelated government intervention and, if yes, what should it look like and how efficient it is? We will tackle these issues by analyzing the existing theoretical considerations and empirical evidence on the subject, as well as experiences of selected transition countries.

      In theory, the rationale for investment incentives seems to be quite limited; economics of investment incentives are largely based on the possibility of (positive)...

    • 7 Policies for attracting foreign direct investment and enhancing its spillovers to indigenous firms: The case of Hungary
      (pp. 181-210)
      Katalin Antalóczy, Magdolna Sass and Miklós Szanyi

      Since 1989, Hungary has been among the leading Central and Eastern European (CEE) countries in attracting foreign direct investments (FDI). It was always the priority of various governments to attract FDI into the country, partly because of the specificities of the country’s heritage from the socialist-communist period. This stance was translated into various policy measures, which were favorable – in some cases discriminatory – towards foreign investors, especially for those who undertook large projects in the country. This friendly approach to foreign investors has become a common feature of capital-lacking Central and Eastern European economies, with the possible exception of...

    • 8 Policies and institutions on multinational corporation-small and medium enterprise linkages: The Brazilian case
      (pp. 211-230)
      Delane Botelho and Mike Pfister

      What can host countries expect from foreign corporations entering their market? Effects such as increased employment and exports certainly are important, but the development of domestic industries through the potential positive spillovers of multinational corporations’ (MNCs) activities, notably via the avenues of transfer of technological and management expertise and sustained economic growth, are among the foremost expectations. Social and economic development depends on several factors, such as investments from the private and public sector in education, health, safety, infrastructure, and technological innovation, and private companies. MNCs as well as local Small and Medium Enterprises (SMEs) have a crucial role to...

    • 9 Is attracting foreign direct investment the only route to industrial development in an era of globalization? The case of the clothing and textiles sector in South Africa
      (pp. 231-266)
      Soeren Jeppesen and Justin Barnes

      Staying competitive in the global economy in the present era is highly challenging. While some nations, industries and firms successfully manage this, others struggle; still others have difficulties in competing at all. The South African government is ranked as a leader in Africa, capable and well resourced, with in- and outbound levels of foreign direct investment (FDI) among the highest on the continent. The South African textiles and clothing industry is also well established, diverse and experienced. Nevertheless, both government and industry have been struggling to meet the challenges of global competition since the coming of democracy in South Africa...

  7. About the authors
    (pp. 267-272)
  8. Index
    (pp. 273-276)
  9. Back Matter
    (pp. 277-278)