Growing Global: Foreign Direct Investment and the Internationalization of Local Suppliers in Scotland

Abstract

The paper examines how the localization of multinationals can be linked to the globalization of local business networks, particularly whether domestic linkages with foreign subsidiaries can facilitate the internationalization of local suppliers. Detailed interviews were held with 16 suppliers and 8 foreign investors in both the Scottish oil-gas and electronics industries. The results highlight the importance to suppliers of 'piggy-backing' multinationals into new markets, but show its greater signi cance in the oil-gas industry. The paper concludes that piggy-backing is dependent on the strength and value of domestic links between suppliers and subsidiaries. Industry-speci c factors determine the intensity of these linkages.The implications for such developments are being absorbed by planning and economic development policy-makers at regional and national levels, as supplier and investor development is increasingly being placed within a wider policy framework of cluster development.

Supplier linkages of foreign-owned manufacturing firms in the UK: the influence of entry mode, subsidiary autonomy and nationality

“…Some studies find that substantial linkages have been developed by foreign-owned firms in engineering, metal manufacturing, chemicals and minerals sectors (Keeble, 1969;Mosely & Townroe, 1973;Munday & Roberts, 2001). Some studies point to a positive development of linkages by foreignowned firms in the electronics sector (such as Ruane, 2000 and2001) whereas others argue that the presence of foreign owned firms will lead to harmful effects in this sector (Raines et al, 2001).…”

Foreign Direct Investment: A Catalyst for Local Firm Development?

“…Some studies have taken a more comprehensive approach in their examination of inter-firm interactions [Rodriguez-Clare, 1996;Dunning, 1998;UNCTAD, 2001], particularly with respect to affiliate -supplier/subcontractor linkages [Poon, 1996;Raines et al, 2001] and type of FDI [Williams, 1997].…”

Will attracting the “creative class” boost economic growth in old industrial regions? a case study of scotland

“…The dominant economic development strategy for much of the post-war era in Scotland, particularly in the 1980s in the immediate aftermath of the closure of numerous large manufacturing plants, was to attract foreign direct investment (FDI) branch plants (Brand et al 2000). This initially met with some high-profile successes, with the opening of a number of major production facilities, particularly in the micro-electronics sector (Raines et al 2001). The 1990s in turn saw the closure or downsizing of a number of these plants and a shift in emphasis from an inward investment strat-egy to one that focused more on indigenous growth through the promotion of business start-ups (Scottish Enterprise 1999).…”