Collective Technology Learning Between Transnational Corporations and Local Business Partners: The Case of West Sweden

10.1068/a3595 ◽  
2002 ◽  
Vol 34 (10) ◽  
pp. 1877-1897 ◽  
Author(s):  
Inge Ivarsson
Keyword(s):  
Transnational Corporations ◽  
Multiple Logistic Regression ◽  
Industry Clusters ◽  
Firm Level ◽  
Technology Learning ◽  
Business Partners ◽  
Local Business ◽  
Technological Cooperation ◽  
Level Data ◽  
Foreign Affiliates

Unique firm-level data from 287 majority-owned foreign affiliates (MOFAs) located in West Sweden are used to analyse the extent in which transnational corporations (TNCs) in a developed host country have established technological linkages, leading to collective technology learning where both TNCs and their local business partners benefit. The findings indicate that local business partners have established substantial levels of organised technological cooperation, not only with manufacturing MOFAs but also with wholesale MOFAs supplying industrial products. This seems to result in collective technology learning where both MOFAs and business partners in Sweden, especially customers, earn advantages. In the case of manufacturing MOFAs, local business partners in West Sweden seem to be important as cooperative partners. By using a multiple logistic regression to analyse key determinants, it was found that the size of MOFAs positively affected the establishment of technological linkages to business partners in Sweden, among both manufacturing MOFAs and sales MOFAs. A positive correlation with linkage formation was also found among manufacturing MOFAs regarding both increasing age and the extent in which they operate within competitive Swedish industry clusters.

scholarly journals Information related service trade within firms: evidence from firm-level data in Germany

2021 ◽  
Author(s):  
Kurt A. Hafner ◽  
Jörn Kleinert
Keyword(s):  
Multinational Firms ◽  
Economies Of Scope ◽  
It Services ◽  
Firm Level ◽  
It Service ◽  
Level Data ◽  
Related Service ◽  
Foreign Affiliates ◽  
Knowledge Intensive ◽  
Parent Companies

AbstractMulti-unit firms have productivity advantages over competitors because of their use of a non-rival asset—firm-specific knowledge—in several units. Using knowledge-intensive services leads to economies of scope in production by multi-unit firms. Such headquarter are usually supplied by parent companies and serve to link different firm units. Headquarter services are difficult to quantify in statistics or surveys, except when they cross-borders and the exchange of services between MNEs and their offshore subsidiaries becomes apparent. This study therefore focuses on IT service imports to explain productivity differences among foreign affiliates of multinational firms in Germany. The authors base the analysis on the population of foreign multinational firms active in Germany and analyze what effect the import of IT services has on their productivity. They find that IT headquarter service flows have significant impacts on foreign affiliates’ productivity in general and US affiliates in particular. As the average IT-service flows (per firm and partner) from parent countries are significantly higher for US affiliates than non-US affiliates, they conclude that the import of IT services from the parent-company is a source of the productivity advantages of US affiliates in Germany.

scholarly journals Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages

2004 ◽  
Vol 94 (3) ◽  
pp. 605-627 ◽  
Author(s):  
Beata Smarzynska Javorcik
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Foreign Ownership ◽  
Foreign Investments ◽  
Firm Level ◽  
Productivity Spillovers ◽  
Level Data ◽  
Firm Level Data ◽  
Foreign Affiliates ◽  
Backward Linkages

Many countries strive to attract foreign direct investment (FDI) hoping that knowledge brought by multinationals will spill over to domestic industries and increase their productivity. In contrast with earlier literature that failed to find positive intraindustry spillovers from FDI, this study focuses on effects operating across industries. The analysis, based on firm-level data from Lithuania, produces evidence consistent with positive productivity spillovers from FDI taking place through contacts between foreign affiliates and their local suppliers in upstream sectors. The data indicate that spillovers are associated with projects with shared domestic and foreign ownership but not with fully owned foreign investments.

scholarly journals Global Production with Export Platforms*

2016 ◽  
Vol 132 (1) ◽  
pp. 157-209 ◽  
Author(s):  
Felix Tintelnot
Keyword(s):  
General Equilibrium ◽  
Host Country ◽  
Foreign Investment ◽  
Multinational Firms ◽  
Multinational Enterprise ◽  
Fixed Costs ◽  
Firm Level ◽  
Level Data ◽  
Multinational Production ◽  
Foreign Affiliates

Abstract Most international commerce is carried out by multinational firms, which use their foreign affiliates both to serve the market of the host country and to export to other markets outside the host country. In this article, I examine the determinants of multinational firms’ location and production decisions and the welfare implications of multinational production. The few existing quantitative general equilibrium models that incorporate multinational firms achieve tractability by assuming away export platforms—that is, they do not allow foreign affiliates of multinationals to export—or by ignoring fixed costs associated with foreign investment. I develop a quantifiable multicountry general equilibrium model, which tractably handles multinational firms that engage in export platform sales and that face fixed costs of foreign investment. I first estimate the model using German firm-level data to uncover the size and nature of costs of multinational enterprise and show that the fixed costs of foreign investment are large. Second, I calibrate the model to data on trade and multinational production for twelve European and North American countries. Counterfactual analysis reveals that multinationals play an important role in transmitting technological improvements to foreign countries and that the pending Canada-EU trade and investment agreement could divert a sizable fraction of the production of EU multinationals from the U.S. to Canada.

scholarly journals Partnership as Experimentation

2019 ◽  
Vol 35 (3) ◽  
pp. 455-488
Author(s):  
Cihan Artunç ◽  
Timothy W Guinnane
Keyword(s):  
Economic Development ◽  
Crucial Role ◽  
Firm Level ◽  
Trade Off ◽  
Business Partners ◽  
Corporate Form ◽  
Level Data ◽  
Firm Level Data ◽  
Stock Corporation ◽  
Commitment Device

Abstract Recent research disputes the view that the joint-stock corporation played a crucial role in historical economic development, but retains the idea that the costless firm dissolution implicit in non-corporate forms deterred investment. A multi-armed bandit model demonstrates the benefits of costless dissolution in an environment where potential business partners are not fully informed. Experimentation creates a spike in dissolution rates early in firms’ lives, as less productive matches break down and agents look for better matches. Many of the better matches adopt the corporate form, whose higher dissolution cost functions as a commitment device. We test the model’s predictions using firm-level data on 12,000 enterprises established in Egypt between 1910 and 1949. The partnership reflected a trade-off between committing to a partner and sorting into potentially better matches, fostering the formation of more productive enterprises (JEL D21, D22, L26, N15, O16).

The Gravity of Knowledge

2013 ◽  
Vol 103 (4) ◽  
pp. 1414-1444 ◽  
Author(s):  
Wolfgang Keller ◽  
Stephen Ross Yeaple
Keyword(s):  
Knowledge Transfer ◽  
Multinational Firms ◽  
Multinational Firm ◽  
Firm Level ◽  
Direct Communication ◽  
Multinational Activity ◽  
Level Data ◽  
Firm Level Data ◽  
Foreign Affiliates ◽  
Firm Model

We analyze the international operations of multinational firms to measure the spatial barriers to transferring knowledge. We model firms that can transfer bits of knowledge to their foreign affiliates in either embodied (traded intermediates) or disembodied form (direct communication). The model shows how knowledge transfer costs can be inferred from multinationals' operations. We use firm-level data on the trade and sales of US multinationals to confirm the model's predictions. Disembodied knowledge transfer costs not only make the standard multinational firm model consistent with the fact that affiliate sales fall in distance but quantitatively accounts for much of the gravity in multinational activity. (JEL F12, F14, F23, L25, O33)

scholarly journals The Impact of Foreign Direct Investment on Productivity of Domestic Firms: The Case of Sudanese Banking Industry

2021 ◽  
Vol 9 (02) ◽  
pp. 2081-2188
Author(s):  
Nasreldin Tomsah ◽  
Khloud Ali
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Banking Industry ◽  
Firm Level ◽  
Productivity Spillovers ◽  
Level Data ◽  
Show Evidence ◽  
Foreign Affiliates ◽  
Domestic Banks ◽  
The Impact

The research expands existing international business literature by exploring the impact of Foreign Direct Investment (FDI) on domestic banks. It investigates how FDI affects the productivity of domestic banks in Sudan. Many countries strive to attract foreign direct investment (FDI) hoping that knowledge brought by FDI will spillover to domestic industries and increase their productivity. In contrast with earlier literature that tried to find positive interindustry spillovers from multinationals, this study focuses on effects operating in banking industry. The analysis, based on firm-level data from Sudan , the results show evidence consistent with positive productivity spillovers from FDI taking place through contacts between foreign affiliates and their local counterparts . The data indicate that productivity spillovers are associated with foreign owned banks.

scholarly journals Location decisions of heterogeneous European firms

2020 ◽  
Vol 9 (3) ◽  
pp. 265-269
Author(s):  
Josep Marti
Keyword(s):  
Logit Model ◽  
Investment Decisions ◽  
Heterogeneous Firms ◽  
Multinomial Logit Model ◽  
Location Decisions ◽  
Firm Level ◽  
European Firm ◽  
Productivity Level ◽  
Level Data ◽  
Foreign Affiliates

We analyze empirically how firms’ characteristics affect the foreign affiliates location decisions of heterogeneous firms in different markets. Using a European firm-level data and estimating the marginal effects for the multinomial logit model, the results corroborate the relevance of firms’ characteristics in their investment decisions, particularly the productivity level.

Implicit Taxes Amid Race to the Bottom in a Global Tax Game

2020 ◽  
Vol 27 (2) ◽  
pp. 42
Author(s):  
Igor Semenenko ◽  
Junwook Yoo ◽  
Parporn Akathaporn
Keyword(s):  
Capital Mobility ◽  
Tax Rates ◽  
Corporate Tax ◽  
Firm Level ◽  
Race To The Bottom ◽  
Tax Subsidy ◽  
Tax Subsidies ◽  
Level Data ◽  
Tax Returns ◽  
Tax Hypothesis

Growing tax competition among national governments in the presence of capital mobility distorts equilibrium in the international corporate tax market. This paper is related to the literature that examines impact of international tax policies on corporate accounting statements. Employing international firm-level data, this study revisits the race-to-the-bottom hypothesis and documents that tax exemptions lowering effective tax rates relative to statutory rates increase pre-tax returns. This finding directly contradicts the implicit tax hypothesis documented by Wilkie (1992), who provided empirical evidence on inverse relationship between pre-tax return and tax subsidy. We also find evidences that relative importance of permanent versus timing component depends on the geography and that decline in corporate tax rates reduces impact of tax subsidies on profitability. Our findings suggest that tax subsidies play a different role than in 1968-1985, which was examined by Wilkie (1992). These results are consistent with the race-to-the-bottom hypothesis and income shifting explanation

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