Patterns of Innovation among Multinational Firms

2018 ◽  
Author(s):  
Patrick J. W. Egan
Keyword(s):  
Developing Countries ◽  
Foreign Investment ◽  
Multinational Firms ◽  
Service Sector ◽  
Host Countries ◽  
The Core ◽  
Country Level ◽  
Level Data ◽  
Econometric Tests ◽  
Empirical Context

This chapter chronicles the spread of innovation-intensive forms of foreign investment. It is primarily descriptive, and provides the empirical context for the econometric tests in subsequent chapters. The multifaceted concept of innovation is investigated in detail in this chapter. Historical patterns of multinational innovation are presented, followed by more recent empirical trends. The evolving sectoral distribution of FDI in developing countries is examined, as are the potential implications for innovative activities. The chapter extensively details patterns of multinational innovation, through firm surveys and aggregated country level data. Additionally, the extent of innovation spillovers and linkages with economic actors in host countries is considered. Among the core findings in this chapter are that innovation is becoming more common in developing countries, innovation is concentrated in specific regions, and service sector investment represents an increasing share of investment in emerging economies. Firms in some sectors are also more likely to embed in host economies than firms in other sectors.

How does the globalization of firms affect corruption in developing economies?

2017 ◽  
Vol 21 (3) ◽  
pp. 256-270 ◽  
Author(s):  
Bokyeong Park ◽  
Onon Khanoi
Keyword(s):  
Foreign Investment ◽  
Developing Economies ◽  
Probit Model ◽  
Policy Implications ◽  
Firm Level ◽  
Content Type ◽  
Exporting Firms ◽  
Country Level ◽  
Level Data ◽  
Firm Level Data

Purpose The purpose of this paper is to examine how firms’ characteristics related to globalization affect their perception on corruption and actual experiences in bribery. It focuses on two indicators of globalization, namely, foreign ownership and export, and confines the scope to developing economies. Design/methodology/approach This analysis uses firm-level data with observation over 60,000 collected from 94 developing economies. The paper employs the probit model to examine how firm characteristics related to globalization affect corruption perception (CP) and incidence. Findings The empirical results reveal that for foreign-invested companies, there is a substantial discrepancy between the perceived corruption and the actual. Although they are involved in bribery as frequently as, or less frequently than local firms, they have greater CPs. Exporting firms are more frequently solicited for bribes, but the effect disappears when time spent for government contact is controlled for. Consequently, foreign investment partly contributes to the corruption control, but the export orientation of firms rather aggravates corruption due to regulative environments in developing economies. Practical implications This study provides policy implications that the corruption control through globalization requires streamlining of administration procedure related to foreign investment or trade and, thus, shortening time to deal with public officials. In addition, governments need to emphasize the importance of foreign investment and prevent unethical practices mediated by local partners. Originality/value The greatest novelty of this paper lies in using firm level data instead of country level unlike most of the literature. Moreover, the authors focus on firms only in developing economies. As well, unlike most studies using only perception indicators as the proxy of corruption, this paper considers both CPs and actual incidence, and compares each other.

scholarly journals US Environmental Regulation and FDI: Evidence from a Panel of US-Based Multinational Firms

2010 ◽  
Vol 2 (3) ◽  
pp. 158-189 ◽  
Author(s):  
Rema Hanna
Keyword(s):  
Foreign Investment ◽  
Multinational Firms ◽  
Clean Air Act ◽  
Econometric Models ◽  
Substantial Variation ◽  
Firm Level ◽  
Level Data ◽  
Regulated Firms ◽  
Firm Level Data ◽  
Clean Air

This paper measures the response of US-based multinationals to the Clean Air Act Amendments (CAAA). Using a panel of firm-level data over the period 1966–1999, I estimate the effect of regulation on a multinational's foreign production decisions. The CAAA induced substantial variation in the degree of regulation faced by firms, allowing for the estimation of econometric models that control for firm-specific characteristics and industrial trends. I find that the CAAA caused regulated multinational firms to increase their foreign assets by 5.3 percent and their foreign output by 9 percent. Heavily regulated firms did not disproportionately increase foreign investment in developing countries. (JEL F23, K32, L51, Q52, Q53, Q58)

Financialisation, institutions and financing constraints in developing countries

2019 ◽  
Vol 43 (4) ◽  
pp. 825-866 ◽  
Author(s):  
Charilaos Mertzanis
Keyword(s):  
Developing Countries ◽  
Financing Constraints ◽  
External Financing ◽  
Access To Finance ◽  
Firm Level ◽  
Country Level ◽  
Level Data ◽  
Financial Depth ◽  
Level Information ◽  
The Impact

Abstract The paper uses a consistent firm-level data from the World Banks Enterprise Surveys to explore the impact of financialisation in the economy on firms’ access to finance in 138 developing countries. Access to finance reflects survey-based firms’ perceptions of external financing constraints. Financialisation is proxied by consistent cross-country measures of financial depth. These proxies capture separately the role of bank-based versus market-based financing. Firm-, sector- and country-level information is jointly used for the analysis. Firm-specific characteristics and economic and non-economic national factors are included as controls. The results show that the proxies of financialisation are broadly robust predictors of financing constraints of firms in developing countries. However, the magnitude of the financialisation effect varies between bank-based and market-based channels of financing as well as between low- and high-income countries, and it is influenced by social, institutional and religious factors.

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.

Foreign Direct Investment and International Technology Diffusion

2019 ◽  
Author(s):  
Difei Geng ◽  
Kamal Saggi
Keyword(s):  
Developing Countries ◽  
Foreign Direct Investment ◽  
Technology Diffusion ◽  
Direct Investment ◽  
Multinational Firms ◽  
Industrialized Countries ◽  
Host Countries ◽  
International Technology Diffusion ◽  
International Mergers ◽  
Local Firms

Foreign direct investment (FDI) plays an important role in facilitating the process of international technology diffusion. While FDI among industrialized countries primarily occurs via international mergers and acquisitions (M&As), investment headed to developing countries is more likely to be greenfield in nature; that is, it involves the establishment or expansion of new foreign affiliates by multinational firms. M&As have the potential to yield productivity improvements via changes in management and organization structure of target firms, whereas greenfield FDI leads to transfer of novel technical know-how by initiating the production of new products in host countries as well as by introducing improvements in existing production processes. Given the prominent role that multinational firms play in global research and development (R&D), there is much interest in whether and how technologies transferred by them to their foreign subsidiaries later diffuse more broadly in host economies, thereby potentially generating broad-based productivity gains. Empirical evidence shows that whereas spillovers from FDI to competing local firms are elusive, such is not the case for spillovers to local suppliers and other agents involved in vertical relationships with multinationals. Multinationals have substantially increased their investments in research facilities in various parts of the world and in R&D collaboration with local firms in developing countries, most notably China and India. Such international collaboration in R&D spearheaded by multinational firms has the potential to accelerate global productivity growth.

FACTORS CONTRIBUTING TO WOMEN’S VENTURE SUCCESS IN DEVELOPING COUNTRIES: AN EXPLORATORY ANALYSIS

2016 ◽  
Vol 21 (01) ◽  
pp. 1650001 ◽  
Author(s):  
JENNIFER M. SEQUEIRA ◽  
SHERRHONDA R. GIBBS ◽  
NORMA A. JUMA
Keyword(s):  
Developing Countries ◽  
Economic Freedom ◽  
Developed Countries ◽  
The Body ◽  
Cultural Norms ◽  
Female Entrepreneurs ◽  
Country Level ◽  
Level Data ◽  
Secondary Analyses ◽  
Human And Social Capital

Although the body of literature on female entrepreneurs is relatively small when compared to that of men; the majority of articles that have focused on female entrepreneurs and issues surrounding them center on women in developed countries. Few studies place emphasis on female entrepreneurs in developing countries. Guided by the resource-based view of human and social capital, the article explores the relationship among individual and entrepreneurial factors, institutional factors and women’s venture success in developing countries. Hypotheses are tested with a sample of 350 female entrepreneurs using individual and country level data from the Global Entrepreneurship Monitor (GEM) database and the Heritage Foundation’s Index of Economic Freedom. Female entrepreneurs were chosen from six developing countries: Argentina, Brazil, Hungary, India, Mexico and South Africa. Results indicate certain factors (i.e. household income, knowing an entrepreneur, and country of origin) play a role in venture success for female entrepreneurs in developing countries. Secondary analyses demonstrated that the developing country’s economic freedom, cultural norms, financial support and government supportiveness may also impact women’s venture success.

R&D in the periphery? Foreign direct investment, innovation, and institutional quality in developing countries

2013 ◽  
Vol 15 (1) ◽  
pp. 1-32 ◽  
Author(s):  
Patrick J.W. Egan
Keyword(s):  
Developing Countries ◽  
Multinational Corporations ◽  
Political Institutions ◽  
Multinational Firms ◽  
Institutional Quality ◽  
Socioeconomic Indicators ◽  
Host Countries ◽  
Firm Level ◽  
Education Levels ◽  
The Impact

This paper considers the relationship between assessments of institutional quality in developing countries and the innovative activities of multinational corporations. Firm entry mode literature has established links between domestic institutions and ownership equity patterns among multinationals, but institutionalist analyses have not adequately addressed the types of activities pursued by multinational firms. I argue that in addition to various socioeconomic indicators, the quality of domestic political institutions in developing countries is an important determinant of local innovative activity. I argue that institutional quality in host countries reinforces consistent patterns of interaction between states and firms, leading to reduced risk of technological expropriation and other undesirable outcomes for firms. I test this argument by examining the impact of institutional assessments, carried out by firms themselves and by outside observers, on R&D effort among multinationals, using firm-level surveys conducted in developing countries between 2002 and 2005. The multilevel empirical analysis suggests that multinational firms are likely to both locate R&D activities and pursue them intensively in developing countries with well-regarded institutions, and that the impact of institutional variables is more significant than other likely predictors, such as education levels in host countries.

Is there such a thing as too long childcare leave?

2017 ◽  
Vol 37 (1/2) ◽  
pp. 2-15 ◽  
Author(s):  
Rense Nieuwenhuis ◽  
Ariana Need ◽  
Henk Van der Kolk
Keyword(s):  
Design Methodology ◽  
Service Sector ◽  
Comparative Data ◽  
Content Type ◽  
Country Level ◽  
Level Data ◽  
Employment Gap ◽  
Employment Of Women ◽  
The Relationship ◽  
Over Time

Purpose The purpose of this paper is to revisit the question whether women’s employment is negatively affected in countries with very long periods of childcare leave. Design/methodology/approach The authors analyzed data on 192,484 individual women, 305 country-years, and 18-countries, combined with country-level data on childcare, unemployment and service sector size. Findings The authors found that in countries with short periods of childcare leave the motherhood-employment gap is smaller than in countries with no childcare leave, while in countries with long periods of childcare leave the motherhood-employment gap is bigger than with short periods of leave. Originality/value The authors argued that to correctly answer the long-leave question – the relationship between duration of leave and employment of women should be explicitly hypothesized as being curvilinear; and childcare leave should be expected to affect only mothers, not women without children; testing the long-leave hypothesis requires the use of country-comparative data in which countries are observed repeatedly over time; and is best tested against person-level data.

The Determinants of Multinational Innovation in Emerging Economies

2018 ◽  
Author(s):  
Patrick J. W. Egan
Keyword(s):  
Emerging Economies ◽  
Multinational Firms ◽  
Economic Sectors ◽  
Country Level ◽  
Patent Counts ◽  
Country Characteristics ◽  
Modelling Strategies ◽  
Econometric Tests ◽  
Resource Sector ◽  
Patenting Activity

This chapter considers innovation outcomes among multinational firms in emerging economies. A variety of econometric tests are conducted, in which innovation is predicted by different firm and country level variables. Innovation is measured in different ways, from patenting activity to firm R&D spending levels. Various datasets are used in this chapter, including firm surveys and patent counts. This chapter tests a number of the hypotheses developed in chapter 2, using different modelling strategies. Statistical analysis is emphasized, however case studies also appear to illustrate the dynamics and mechanisms contained in the models. The firm identifies a number of firm and country characteristics that impact the innovation proclivity of multinational firms. The size of certain economic sectors within the host country, in particular the natural resource sector, also impacts the likelihood of multinational innovation.

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