The Impact of Multinational Enterprise Strategy on Indigenous Enterprises: Horizontal Spillovers and Crowding Out in Developing Countries

Spencer, Jennifer W.

doi:10.5465/amr.2008.31193230

Cited by 284 publications

(297 citation statements)

References 104 publications

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“…Crowding out occurs when the MNE increases competition in local product, labour, or financial markets in a way that is intense enough to disadvantage local enterprises (Spencer, 2008). From the supplier's perspective, the increased openness of the Japanese economy to foreign entrants may make access to a stable group customer base less attractive.…”

Section: Resultsmentioning

confidence: 99%

“…Anecdotal evidence suggests that keiretsu have deterred inward investment into Japan (Czinkota and Kotabe, 2000) through informal entry barriers that such groupings can create. As such, where successful inward investment occurs in the presence of vertically-linked keiretsu, the domestic sector is likely to experience significant crowding-out effects (Spencer, 2008). This phenomenon is likely to be more pronounced within sectors than across them, and may be exacerbated by competition between firms in labour markets.…”

Section: H2: Sectors Dominated By Horizontal Keiretsu Experience Declmentioning

confidence: 99%

“…MNEs can formally or informally assist or provide effective guidelines to improve final products they offer. It is unlikely that independent organizations will be able to replicate complex and tacit knowledge in full, as foreign firms and local recipients have different configurations of knowledge, technologies, organizational practices, and strategies (Spencer, 2008).…”

Section: Comment [Ds2]mentioning

confidence: 99%

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Spillovers from FDI and local networks

Kimino

Driffield

Saal

2014

The Multinational Business Review

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Section: Resultsmentioning

confidence: 99%

Section: H2: Sectors Dominated By Horizontal Keiretsu Experience Declmentioning

confidence: 99%

Section: Comment [Ds2]mentioning

confidence: 99%

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Spillovers from FDI and local networks

Kimino

Driffield

Saal

2014

The Multinational Business Review

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“…Repeated interaction between foreign MNEs and local actors may improve information about and access to resources such as labor, infrastructure, and finance (Mariotti et al, 2010;Mudambi, 2002;Spencer, 2008). Interactions among foreign MNEs in core locations may also lead to technology and other knowledge spillovers (Mudambi & Santangelo, 2016;Santangelo, 2009).…”

Section: Core and Periphery Locationsmentioning

confidence: 99%

Core or periphery? The effects of country-of-origin agglomerations on the within-country expansion of MNEs

et al. 2018

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We show how the initial subnational entry location of foreign multinational enterprises (MNEs) in China influences their subsequent within-country location choices and expansion speed. We distinguish between MNEs that establish their first subsidiary in co-ethnic cores -dense agglomerations of other firms from the same country of origin -and MNEs that locate their first subsidiary in the periphery, i.e., outside of these co-ethnic cores. To identify co-ethnic cores in China, we employ a geo-visualization methodology, which draws the boundaries of cores organically and dynamically over time. We contrast our findings with the prevailing approach of using static administrative boundaries for identifying agglomerations. Our results provide evidence of path dependency, in that (a) entry through subnational locations with strong co-ethnic communities is followed by expansion into other locations where co-ethnic communities are present, and that (b) entry through co-ethnic communities accelerates the pace at which MNEs establish additional subsidiaries in China. We also find that co-ethnic community effects continue to influence within-country MNE activities over time, despite a host of economic, institutional, and investment developments.

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“…Further reducing experience within small businesses, Moy and Lee (2002) find that Hong Kong graduates view careers with multinational corporations as more attractive than with SMEs due to their perceived job security and long-term career prospects. SMEs also lose out as foreign firms push up labour costs and hinder their attraction of skilled and qualified workers (Spencer, 2008).…”

Section: Foreign Direct Investment and Local Entrepreneurshipmentioning

confidence: 99%

Foreign direct investment and the SME sector

Thompson

Zang

2015

International Journal of Entrepreneurial Behavior &Amp; Research

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Structured Abstract: PurposeAlthough foreign direct investment (FDI) and entrepreneurship are potential routes to recovery (Girma and Wakelin, 2001; Lyon et al., 2002), existing literature is divided on the relationship between the two. This study examines the influence of foreign investment on the local SME sector after the 2008 financial crisis. Design/methodology/approachLocal authority district data from Great Britain is used to examine the influence of foreign firm employment on the size of the local SME sector as a proportion of all firms, and foreign firm influence on firm births in the locality. In order to control for local geographical, infrastructural, and economic conditions regression analysis is used to examine the relationship between foreign business employment and indigenous business activities. FindingsThe potential for technological spillovers and spinout activities appears to dominate with firm birth rates higher where there is greater foreign firm employment. However, there is also evidence of crowding out in relation to the existing SME sector, which is found to be reduced in size where foreign influence through employment is greater. Research ImplicationsThe results here indicating a complementarity relationship between foreign influence on employment and firm births is important for policy makers looking to revive struggling local economies. However, the relevant support needs to be in place to maximise the benefit from the supply of new entrepreneurs generated. Originality/valueUnlike many other studies the relationship between the SME sector, firm births and foreign influence is considered at a local level and where economic conditions are more uncertain and economic recovery is less taken for granted. A better understanding of the relationship allows more appropriate policy to be developed in order to aid local economies to recover.

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The Impact of Multinational Enterprise Strategy on Indigenous Enterprises: Horizontal Spillovers and Crowding Out in Developing Countries

Cited by 284 publications

References 104 publications

Spillovers from FDI and local networks

Spillovers from FDI and local networks

Core or periphery? The effects of country-of-origin agglomerations on the within-country expansion of MNEs

Foreign direct investment and the SME sector

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