Firm heterogeneity and FDI-related productivity spillovers: A theoretical investigation

A number of existing empirical studies have attempted to estimate the foreign direct investment (FDI)-related productivity spillover effects to domestic firms in host economies using various methodologies and measures of FDI. This literature has produced mixed results. While some studies found positive spillovers, others reported zero or even negative spillovers. In this paper, using a model of firm heterogeneity, we provide a rigorous theoretical justification for the mixed findings. We show that FDI-related productivity spillover effects can be decomposed into a direct and an indirect effect. If the direct effect is positive then relatively less capable domestic firms that were not able to survive in the industry (before the arrival of foreign firms) can enter the industry, which decreases the average (expected) productivity of the industry. If this indirect effect is sufficiently strong then the overall impact of FDI on productivity of domestic firms can be zero or negative. Hence, irrespective of the type of FDI (vertical or horizontal) and control variables included in empirical models, one may find negative or zero spillover effects.     

Strategic and Operational Determinants of Relationship Outcomes With New Venture Suppliers

While the vast majority of the supplier selection and development literature has focused on relationships between mature, established firms, significantly less attention has been paid to relationships between established firms and new, entrepreneurial ventures. This study addresses this important topic and, using an interdisciplinary lens, investigates the question of how established buying firms can work with new ventures to achieve desired relationship outcomes. Drawing on the literature from the disciplines of entrepreneurship and supply chain management, we propose a theoretical model that links buying firms' strategic orientation in supplier selection (innovation and cost in strategic supplier selection) and operational approach in supplier development (direct and indirect development of new venture suppliers) with new venture‐specific relationship outcomes (purchasing volume and realized innovations). The model's predictions are tested on cross‐sectional survey data from 136 buying firms. Our results contribute to the emerging research stream at the supply chain management–entrepreneurship interface and enhance the understanding of relationships between established firms and new ventures.     

Technology spillovers: Kenya and Malaysia compared

This paper aimed at investigating the existence of productivity spillovers and their transmission channels in both Kenya and Malaysia firm-level panel data from the manufacturing sector for the period 2000–2005. Both countries have a long history of relying on FDI in industrial development. The existing literature on productivity spillovers suggests that productivity spillovers may be one of the most important effects that foreign MNEs impart to local firms in developing countries. Yet still, few studies exist in both countries on productivity spillovers and their transmission channels. Three spillover channels were examined: demonstration, competition, and information. In addition, the backward linkage channel was examined for the case of Malaysia. The results reveal that there is limited evidence of negative productivity spillovers from foreign firms to domestic firms through the competition effects in Kenya. In Malaysia, there is evidence of positive spillovers from foreign-owned firms to domestic firms through the demonstration effects. In addition, there is evidence of negative spillovers through the competition effects as well as backward linkages. There is also evidence of positive productivity spillovers from domestic firms to foreign-owned firms through backward linkages. Productivity spillovers are found to be dependent on the technology gap.     

Clustering,MNEs, and Innovation: Who Benefits and How?

Abstract

This paper explores three under-researched questions in the literature on multinational enterprises (MNEs), clustering, and innovation. First, to what extent does multinationality lead to higher rates of innovation activity and performance? Second, what, if any, is the link between MNE cluster location and innovation inputs and outputs? Third, are there any significant differences between enterprises belonging to domestic and overseas MNEs in these regards? Evidence is based primarily on 11,775 firms derived from the UK Community Innovation Survey 2007. Diversity in the regional economy exerts the most consistent positive influence, followed by the scale of employment in the enterprise’s own industry. Enterprises belonging to domestic MNEs appear to exert higher levels of innovation effort. However, evidence regarding their superiority in innovation outputs was weaker. Contrary to Michael Porter’s work, it appears that enterprises belonging to overseas firms benefit more than domestic firms.     

Foreign Direct Investment,Transactions Linkages,and the Performance of the Domestic Sector

Using data from the UK Census of Production, including foreign ownership data, and information from UK industry input-output tables, this paper examines whether the intensity of transactions linkages between foreign and domestic firms affects productivity growth in domestic manufacturing industries. The implications of the findings for policies promoting linkages between multinational and domestic firms in the UK economy are outlined.     

Why do buyers share knowledge with suppliers in new product development? current and alternative supplier antecedents

Purpose: Interfirm knowledge sharing has been well recognized to activate the performance and competitiveness improvement of the firms. Previous research has discussed the impacts of current suppliers on buyer–supplier knowledge sharing, but does not explain how this influence occurs. This study aims to disclose the mechanism by which both current and competing suppliers impact buyer–supplier knowledge sharing in buyers’ new product development activities.

Methodology/approach: This study proposed a conceptual model based on relational exchange theory and developed eight hypotheses. Questionnaire survey was used to collect empirical data from R&D staff of Taiwanese electronics firms. This study distributed 1,475 questionnaires and received 246 eligible questionnaires. Structural equation modeling was used to test and verify appropriateness of the proposed model.

Findings: The findings show that current supplier asset specificity positively and directly influences buyer–supplier knowledge sharing in new product development. The current supplier asset specificity also has indirect positive influence on buyer–supplier knowledge sharing in new product development via the mediating effects of buyer trust, satisfaction, and commitment. However, the attractiveness of alternative suppliers only indirectly and negatively affects buyer–supplier knowledge sharing via the mediating effects of buyer trust, satisfaction, and commitment.

Research limitations/implications: This study surveyed the firms in Taiwanese electronics industry. Nevertheless, new product development activities are executed by electronics firms in numerous countries and firms in various industries. For validating the generalization of this study’s results, future research can investigate firms in other industries and countries to verify the proposed model and hypotheses.

Practical implications: Current suppliers’ asset specificity is found to exert more influence on buyer–supplier knowledge sharing than alternative attractiveness. The findings imply that current suppliers should focus on investing specific assets for buyers other than stress the attractiveness and threat of competing suppliers.

Originality/value/contribution: This study initiates to approach the antecedents and influence mechanism of current buyer–supplier knowledge sharing via both perspectives of current and competing suppliers.     

Foreign Firms and Chinese Employment

This paper examines the effect of foreign direct investment (FDI) on employment in the Chinese manufacturing sector. As one of the world's largest recipients of FDI, China has arguably benefited from foreign multinational enterprises in various respects. However, one of the main challenges for China, and other developing countries, is job creation, and the effect of FDI on employment is uncertain. The effect depends on the amount of jobs created within foreign firms as well as the effect of FDI on employment in domestic firms. We analyse FDI and employment in China using a large sample of manufacturing firms for the period 1998–2004. Our results show that FDI has positive effects on employment growth. The relatively high employment growth in foreign firms is associated with their firm characteristics and their high survival rate. Employment growth is also relatively high in private domestic Chinese firms. There also seems to be a positive indirect effect of FDI on employment in private domestically‐owned firms, presumably caused by spillovers.     

Strategic Behaviour under European Antidumping Duties

In this paper we develop a dynamic two-period model of imperfect competition to analyse the effects of European antidumping duties on firm behaviour and domestic welfare. Our model is one of the first to complement the European empirical literature on antidumping policy and can usefully be compared with papers dealing with the effects of US antidumping policy. We arrive at three important conclusions: (a) the strategic behaviour of European firms under European antidumping rules may run in the opposite direction compared to the incentives for US firms provided under the US antidumping rules; (b) US antidumping rules perform better than European rules in terms of domestic welfare and in terms of protecting domestic value added and employment; (c) the Strategic Trade Policy argument for protection need not apply for antidumping duties because the level of protection is endogenously determined by the firms involved.     

Public research/industry relationships: Efficiency conditions

If economists of technical change dealt with the public research/industry interface, the literature lacks empirical contributions. The present paper is clearly empirical. It investigates the efficiency of the relationships between public research institutions and industry from the point of view of the firm looking for solutions to its problems. The empirical work is based on the study of 32 cases of partnerships in France. It suggests that the efficiency of the interface depends on the context (nature of innovations, public research skills needed, duration of relationships, technological strategies of firms) and on the strategies of public research institutions (organizational linkages adopted). Four hypotheses are examined to test these efficiency conditions.     

供应链集中度与企业创新——基于中国制造业上市公司的实证研究

信息技术革命和国际垂直分工深刻地改变了全球制造业的生产格局和竞争基础，传统的企业间竞争正逐渐演化为供应链间的竞争。对2011-2018年A股制造业上市公司的实证分析发现：供应商集中度负向影响企业创新，但这一效应在市场地位较高的企业中得到弱化；客户集中度与企业创新则呈显著正相关，且在市场地位较高的企业中得到强化。研究还发现，融资约束缓解是供应链集中度影响企业创新活动的作用渠道。研究对于供应链与创新活动之间的关系做出了文献贡献，并对创新驱动发展战略下企业根据自身市场地位权变性地从事创新活动提供了实践指导。     

Productivity spillovers from foreign direct investment: evidence from Turkish micro-level data

This paper analyzes the productivity spillovers from foreign direct investment (FDI) using Turkish firm-level data for a more recent time period, 2003–2010, which coincides with significant FDI inflows both in manufacturing and service sectors in the region. The empirical model is derived from endogenous growth theory whereby the rate of technological progress is partly determined by technology transfers and spillovers from international contacts, our exclusive focus being on FDI-induced spillovers. The impact of FDI onto the firm-level productivity is evaluated via the channels of horizontal and vertical linkages. The empirical results show that horizontal linkages decrease the productivity of firms, whereas vertical linkages exert a positive impact onto the local productivity levels, thereby drawing attention of policy makers towards strengthening of supplier–buyer relationship between local and multinationals in order to optimize the benefits from FDI. This study also acknowledges the heterogeneity of local (foreign) firms and their differential capacity to absorb (exude) the FDI-induced externalities.     

Interactions,innovation, and services

Although research has acknowledged the importance of supplier–buyer relationships for goods innovation, empirical evidence on the extent and nature of the effects of original equipment manufacturing (OEM) supplier–buyer relationships on service innovation remains scarce. Based on a survey of 152 suppliers in Taiwan, this study concludes that the interaction orientation of OEM suppliers is a key factor influencing the development of two competencies: joint innovation competence and cross-functional information dissemination competence. These two competencies contribute to OEM suppliers’ exploitative service innovation and explorative service innovation, respectively. In other words, applying a resource-based view, this study provides clarity regarding the linkages shown below (an organization’s strategic orientation influences its development of organizational capabilities and results in organizational performance) for the purpose of exploring the relationship between interaction orientation and service innovation.     

产业关联视角的FDI出口溢出效应:分析与实证

文章从产业关联视角切入,基于已有研究梳理了FDI之东道国企业出口溢出效应发挥作用的机制,构建了一个FDI-出口溢出机理系统,据以提出实证模型并做了相应检验。研究揭示,FDI出口溢出借助产业关联的三个机制发生,但三个机制效应各异。引入中国28个制造行业相关数据的实证检验显示:FDI借助后向关联机制产生的出口溢出效应最为显著,借助水平关联机制的出口溢出效应仅在低技术企业中显著,而借助前向关联机制的出口溢出效应则为负;动态上,FDI后向关联出口溢出效应呈渐增态势,水平关联出口溢出效应则逐渐减弱。     

Subsidiary roles,vertical linkages and economic development: Lessons from transition economies

Vertical supply chain linkages between foreign subsidiaries and domestic firms are important mechanisms for knowledge spillovers, contributing to the economic development of host economies. This paper argues that subsidiary roles and technological competences affect the extent of vertical linkages as such as well as their potential for technological spillovers. Using survey evidence from 424 foreign subsidiaries based in transition economies, we tested for the effect of subsidiaries’ autonomy, initiative, technological capability, internal and external technological embeddedness on the extent and intensity of forward and backward vertical linkages. The evidence supports our main argument that the potential of technology diffusion via vertical linkages depends on the nature of subsidiary roles. We discuss the implications for transition as well as other developing countries.     

Multinational enterprises and domestic wages: The contingent effect of skill composition

While previous literature has extensively shown that foreign-owned firms pay higher wages than domestically owned firms, the examination of intra-industry wage spillovers between foreign-owned and domestic companies has received much less attention, particularly among non-core EU economies. In this paper, we contribute to the literature on wage spillovers of foreign multinational enterprises onto domestic firms by considering whether the presence of MNE subsidiaries in the Spanish manufacturing industry affects wages in domestic firms in the same industry. Although no evidence supports the existence of wage spillovers from MNEs onto domestic firms on aggregate, we show that the effect of this outside presence on domestic wages is significantly more positive in step with the higher level of workers’ skills in domestic firms. Because only workers in domestic firms with a highly skilled workforce will benefit from wage spillovers from the foreign firm presence in the industry, policy makers need bear in mind that not all FDI will automatically generate spillover benefits to domestic firms.     

Driving dynamic knowledge articulation and dynamic capabilities development of service alliance firms

By investigating drivers of dynamic learning in service alliance firms, this empirical study demonstrates the locus of dynamic knowledge articulation (DKA) and dynamic capabilities (DCs) development. This study uses a sample of 363 service alliance firms to test the distinctive role of drivers of dynamic learning in DKA and DC development. The results show that manager integration powers, external linkages, codification of experience, and ambiguity have positive effects on DKA. Moreover, DKA has a strong positive influence on DC development. This study contributes to the literature by focusing on DKA and DC development from the perspective of processes, structure, and DCs of service alliance firms.     

Does foreign investment benefit the exporting activities of Vietnamese firms?

Using firm-level data, this paper examines the effects of foreign investment on the exporting behaviour of domestic firms in the Vietnamese manufacturing and service sectors. Applying the Heckman selection model on panel data and following the Wooldridge approach, we find that investment by foreign firms has a significant positive effect on the decision of domestic firms in the same and upstream sectors to export. The proportion of exports of domestic firms declines through horizontal and forward linkages, but increases through backward linkages in the manufacturing sector. However, there is only weak evidence in support of export spillovers on domestic firms in the service sector. We also find that the presence of foreign firms has differing effects on the exporting activities of low- versus high-tech firms in the manufacturing sector.     

FDI与内资企业技术进步之间的关系——以江苏省为例的实证研究

江苏省是我国重要的FDI聚集地之一,然而以这一地区为研究对象的关于FDI技术外溢效应的研究并不多见。本文以江苏省为研究对象,利用2000至2006年27个制造业行业面板数据,估算了FDI对江苏内资企业生产率水平和生产率增长率的影响。实证结果表明:在密集使用外资的江苏省内,FDI对江苏省制造业内资企业的技术进步效应主要依赖于行业间的产业关联,总体而言,行业间外溢效应显著,行业内的外溢效应并不明显。但在高附加值产业,内资企业的技术进步不仅来自于行业间的关联,而且来自于行业内部外资企业的技术扩散和竞争。     

The impact of R&D on value added for domestic and foreign firms in a newly industrialized economy

This study compares the impact of R&D on value added between domestic and foreign firms in Singapore. The analysis is based on a comprehensive panel database from 1993 to 1999 provided by the Singapore Government. Our results found that R&D investments of foreign firms generated higher value added than those of domestic firms, and that the difference in value added contributed by R&D was moderated by the type of R&D and the technological level of industry. The study supports the argument that the ownership advantages possessed by foreign firms, relative to domestic firms, have positive effects on R&D performance.     

The Role of Market Orientation In Business Dyadic Relationships: Testing an Integrator Model

Over the last decade market orientation and relationship marketing have been huo of the most outstanding fields of research within Marketing discipline. However, little at tention has been devoted towards the investigation of the interface existing between both concepts. The aim of this study is to overcome this deficiency. Thus, the paper begins with a review of the existing literature into relationship marketing and market orientation as well as their main constructs. The result of this analysis is the proposal of a theoretical causal model in which the cultural market orientation that buyer firms show appears as a conditioning factor of their loyalty towards a supplier. Next, the methodology followed as well as the empirical contrast of the model proposed are thoroughly presented. R e empirical data was obtained from huo personal surveys conducted on the same sample of 141 industrial companies. Finally, results, conclusions and practical implications are discussed. In this way, the research proves that a buyer firm’s cultural market orientation acts as an indirect antecedent to the degree of loyalty shown to its main supplier.