How TNC subsidiaries shine in world cities: Policy implications of autonomy and network connections

Abstract

The study examines the relationship between performance and patterns of autonomy and the network relationships used by the foreign subsidiaries of transnational corporations (TNCs) in world cities compared to those subsidiaries outside these locations. This is done by exploring if these patterns differ in foreign subsidiaries in Greater Copenhagen compared to elsewhere in Demark. The indings reveal that there are important differences in the relationships between performance and the autonomy and network structures in foreign subsidiaries. These indings are discussed and policy implications distilled. The study inds that the scope of inward foreign direct investment (FDI) policy could be usefully extended to encompass urban development thereby helping cities develop assets, institutional support and infrastructure that can enhance agglomeration beneits and global connectivity. The indings indicate policies, aimed at helping subsidiaries embed in host location networks and incorporate these networks into other parts of the parent company, could be beneicial. The paper also discusses economic and social inequality that can stem from network patterns and the inclination of subsidiaries to operate autonomously in world cities. It proposes policy options that can lead subsidiaries to undertake high-value activities and innovation in world cities.

Global Cities and Multinational Enterprises: Integrating the Existing Concepts for Future Research Studies

“…While this was true for domestic economies (as a whole), similar effects can also be identified for GCs. They include the benefits of technology transfer, local market structure, levels of employment and human resource development (Jacobs et al, 2016;Verginer & Riccaboni, 2021), average labour productivity and wages (Sun & Chen, 2017), effects experienced through linkages between MNEs and other firms operating in GCs (McDonald et al, 2020), and increased competition and knowledge spillovers to the GC economy (Cantwell & Piscitello, 2005;Yang et al, 2020).…”