Do Management Innovations of Indigenous Firms Benefit from Managerial Spillovers from Multinational Enterprises?

Zhao, Hongxin; Ozer, Muammer; Rong, Weidong; Mondejar, Reuben

doi:10.1007/s11575-019-00403-9

Cited by 7 publications

(3 citation statements)

References 99 publications

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“…Resource dependence theory (RDT) suggests that firms need financial, physical, technological, and information resources that are usually obtained from their external environment, which potentially makes the firms and their actions dependent on the external sources of such resources (Pfeffer and Salancik, 2003). Firms also need to learn from each other (Zhao et al, 2019), invest in innovation in the long run (Ozer and Dayan, 2015), and need to be flexible in their approach (Ozer, 2002). Recent studies have used RDT to explain why firms from developing countries (such as Brazil, China, India, and Russia) go for outward IFDI to secure incoming resources (Gaffney et al, 2013).…”

Section: Resource Dependency Theorymentioning

confidence: 99%

Role of imported raw materials in the performance of inward foreign direct investments in Ethiopia

Dayan

Leung

Ozer

2022

IJOEM

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PurposeDrawing on the resource dependence theory (RDT), this paper investigates ownership composition, export intensity, and industry class as moderating factors to investigate the role of imported raw materials in performance of inward foreign direct investment (IFDI) in Ethiopia.Design/methodology/approachThe hypotheses were tested using secondary data obtained from the 2016 Central Statistical Agency (CSA) on Large- and Medium-Scale Manufacturing and Electricity Industries Survey. The data included basic quantitative information on the country's manufacturing industry. The data items for the 2016 manufacturing and electricity industries surveyed are the numbers of proprietors or establishments involved in various sectors. The report did not record small firms that employed fewer than 10 people and did not use power-driven machinery. Two-Stage least squares (2SLS) regression analysis was performed to test the proposed hypotheses.FindingsThe results of this study indicate that three moderators (ownership composition, export intensity, and industry classification) interact with the hypothetical relationships between imported raw materials and performance. These findings enrich the knowledge of IFDI firms' operations in Ethiopia and in other least-developed countries (LDCs). The findings could provide information for IFDI firms that are looking to invest in LDCs.Research limitations/implicationsLike all social science research, this study has some limitations. First, the research was conducted with the data found in the Report on Large- and Medium-Scale Manufacturing and Electricity Industries Survey In 2016. This was the first year of the second five-year Growth and Transformation Plan (GTP II), a national development plan for the 2016–2020 period. Continual research on IFDI in Ethiopia in the following years will be needed to get a full picture of the effects of the determinants on IFDIs.Practical implicationsTo IFDI investors, the result of this thesis demonstrates several alternatives to overcoming hurdles in manufacturing operation. The results find that J.V. firms make better use of imported raw materials than W.O. subsidiaries in order to achieve better performance. Concerning the choice between focusing on export or domestic markets, the study suggests that domestic market—oriented companies require less imported raw materials to achieve better performance. Concerning the comparative advantage on different industries, this study found the performance of firms in Industry 12 depended on imported raw materials. These findings highlight the challenges and opportunities for potential foreign investors. Ownership composition, market factors, and industry factors should be well considered in making investment decisions.Originality/valueThis is one of few studies on IFDI in Ethiopia, the most populous LDC. Ownership composition, export intensity, and industry class are used as moderating variables to investigate the difference between imported raw materials and the level of expatriate deployment to IFDI performance. For IFDI investors, the results of this study demonstrate several alternatives to overcoming hurdles in manufacturing operation.

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Section: Resource Dependency Theorymentioning

confidence: 99%

Role of imported raw materials in the performance of inward foreign direct investments in Ethiopia

Dayan

Leung

Ozer

2022

IJOEM

Self Cite

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“…This is obviously the reason why reducing levels of FDI has a long-term effect on decreasing levels of indigenous innovation in these developing economies. Multinational companies are known to be major benefactors of knowledge to local businesses (Zhao et al 2019), hence increased numbers of multinationals in developing economies are major sources of knowledge that can boost indigenous innovation in countries where such expertise is not adequate.…”

Section: Model Estimationmentioning

confidence: 99%

“…Kastrati et al (2016), among other scholars, have made strong arguments that FDI has a positive effect on indigenous innovation. Zhao et al (2019) opined that multinational enterprises (MNEs) transfer technical knowhow to their host markets by offering training to local employees who then absorb and leverage knowledge to spur innovation in domestic firms that they later get involved in. With this notion, several developing countries have sought to attract more FDI inflows by offering incentives to foreign investors in a bid to attract them into the local market.…”

Section: Introductionmentioning

confidence: 99%

Assessing the asymmetric linkages between foreign direct investments and indigenous innovation in developing countries: A non-linear panel auto-regressive distributed lag approach

Asunka

et al. 2020

South African Journal of Economic and management Sciences

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Background:The contributions of indigenous innovation and foreign direct investments (FDI) inflows are critical elements of economic growth and hence very important for developing economies. FDI inflows have been recognised as having a direct influence on innovation in host countries. The relationship between these two variables is explored and well documented in literature. However, these studies have focused on linear relationships between FDI and indigenous innovation, ignoring a possible asymmetric relationship between them. Aim:The current study aims to analyse the existence of hidden cointegration and asymmetries between the two variables using a non-linear approach.Setting: The focus of this study is on developing countries. Five countries are selected from the regions of Africa, Asia, Europe and South America. These countries are chosen on the basis of economic status (all countries are developing countries) and data availability. Methods:The study employs panel data of 20 developing countries from 1993 to 2017. The study employs the non-linear auto-regressive distributed lag model to test for an asymmetric relationship between the variables. The variables are deconstructed into their negative and positive components to identify possible hidden cointegration and asymmetries that exist between them. This method allows for the detection of long-run asymmetric relationships in a non-linear fashion. Results:The empirical findings show that a long-run cointegration and asymmetric relationship exists between the negative and positive components of FDI and indigenous innovation. For the four regions, positive changes in FDI directly influence positive changes in indigenous innovation. Negative changes in FDI have no effect on the positive changes in indigenous innovation in the countries under study. However, negative changes in FDI influence negative changes in indigenous innovation across the four regions. Conclusion:FDI inflows have a positive and significant effect on indigenous innovation in developing countries, and reduction in FDI can lead to reduction in innovation output in the long term. Policy directions in developing countries will be effective if they are centred on non-linear relationships between the investigated variables.

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Does Eco-Innovation of Emerging Market Firms Benefit from Knowledge Spillovers of MNC in a Multi-dimensional Task Environment?

Qu,

Wang,

Wei

et al. 2024

Manag Int Rev

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Taking a socially proactive stance that aligns with their economic imperatives has led multinational corporations (MNCs) to focus on social innovation that tackles environmental challenges (or eco-innovation hereafter). Their knowledge of eco-innovation is important to emerging markets that are facing severe environmental challenges and to emerging market firms (EMFs) whose eco-innovation activities face resource and knowledge constraints. MNCs, through their foreign direct investment (FDI) activities in host emerging markets, can divulge economic, knowledge and environmental values of eco-innovation, helping EMFs to improve their eco-innovation through knowledge spillover channels. Taking the value-based approach, we draw on the eco-innovation research and the MNC/FDI spillovers literature to develop hypotheses on the relationship between regional knowledge spillovers of MNCs and the eco-innovation of EMFs in a multi-dimensional task environment characterized by munificence, complexity and dynamism. Our empirical examination is based on a sample of Chinese manufacturing firms from 2003 to 2013. We find support for hypotheses that regional knowledge spillovers of MNCs enhance the positive effects of munificence and mitigate the negative effects of complexity and dynamism on the eco-innovation of EMFs.

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Do Management Innovations of Indigenous Firms Benefit from Managerial Spillovers from Multinational Enterprises?

Cited by 7 publications

References 99 publications

Role of imported raw materials in the performance of inward foreign direct investments in Ethiopia

Role of imported raw materials in the performance of inward foreign direct investments in Ethiopia

Assessing the asymmetric linkages between foreign direct investments and indigenous innovation in developing countries: A non-linear panel auto-regressive distributed lag approach

Does Eco-Innovation of Emerging Market Firms Benefit from Knowledge Spillovers of MNC in a Multi-dimensional Task Environment?

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