Exploring the Link between Foreign Direct Investment, Multinational Enterprises and Spillover Effects in Developing Economies

Malik, M. Abdur Rahman; Rehman, Chaudhry Abdul; Ashraf, Muhammad; Abbas, Rana Zamin
January 2012
International Journal of Business & Management;Jan2012, Vol. 7 Issue 1, p230
Academic Journal
Multinational enterprises exist because they hold certain competitive advantages over their local counterparts and affect local economies through their spillover effects. Research streams exploring the raison d' etre and consequences of MNEs are quite distant and remote. This paper analyzes and integrates these two streams of literature, i.e. the competitive advantages that MNEs hold and their spillover effects in developing countries. The paper proposes a relationship and predicts the nature of spillover effects on the basis of competitive advantages of MNEs. This paper can guide the policymakers of developing countries to differentiate between the FDI that is good for their countries and FDI that weakens the already fragile economies of developing countries. The paper also opens a new avenue for the researchers by pointing towards a potential connection between MNEs' competitive advantages and their spillover effects for the local economies. The relationship between FDI and competitive advantages of MNEs has rarely been researched previously and thus this paper contributes significantly to the existing literature.


Related Articles

  • THE MULTINATIONAL COMPANIES AND THE EMERGING MARKETS. Laura, Diaconu // Annals of the University of Oradea, Economic Science Series;2008, Vol. 17 Issue 1, p97 

    The term of emerging markets defines the developing states that are an important source of cheap raw materials and labor force for the multinational companies, which are looking for competitive advantages. Consequently, the potential of these markets have determined important changes in the...

  • INNOVATIVE COMPETITIVE ADVANTAGE DETERMINATION MODEL. Braslina, Liga; Viksne, Kaspars; Cumakovs, Andrejs; Batraga, Anda // Economic Science for Rural Development Conference Proceedings;2014, Issue 35, p34 

    Nowadays, in the times of globalisation, competitive business environment, market saturation, and the increased consumer power, the client becomes increasingly more definitive in manufacturer's and client's interrelations. Therefore, an efficient satisfaction of client needs becomes increasingly...


    n the last few years as many emerging markets have liberalized, acquisitions have become an important means to achieve competitive advantage and growth for firms that participate in these markets. Yet, there is very little research that examines whether these acquisitions have created value for...

  • Contributions of Multiculturalism to the Competitive Advantage of an Organisation. Raatikainen, Pasi // Singapore Management Review;2002 1st Half, Vol. 24 Issue 1, p81 

    Multiculturalism is becoming a norm in the global companies. It brings sonic difficulties hut the results demonstrated that cultural diversity does in fact add value and, within the proper context, contributes to firm competitive advantage. It is argued that diverse groups make better decisions...

  • The Dynamics of Cross-Cultural Management Knowledge Transfer: from Taiwan to the Philippines. Tsang-Yao Chen; Yi-Chang Tsai; Su-Houn Liu // International Proceedings of Economics Development & Research;2011, Vol. 14, p183 

    This study exploresthe under-researched phenomenonof cross-cultural management knowledge transfer. Although knowledge has been recognized by management scholars as a critical base of competitive advantage[13], it is not clear how firms could effectively manage the transfer of management...

  • THE ROLE OF GLOBAL BUSINESS-TO-BUSINESS MARKETING COMMUNICATIONS IN THE FORMER YUGOSLAVIAN COUNTRIES. Jerman, Damjana; Završnik, Bruno // Enterprise in Transition: International Conference Proceedings: ;2005, p353 

    The article discusses the role of global business-to-business marketing communications in Yugoslavian countries. The management of business-to-business marketing communications can be a competitive advantage in achieving the strategic company objectives. Marketers must understand that various...

  • Dynamic Capabilities In International Expansion. Luo, Yadong // Journal of World Business;Winter2000, Vol. 35 Issue 4, p355 

    This article articulates a dynamic capability perspective on international business. The three essential ingredients of dynamic capability -- capability possession (distinctive resources), capability deployment (resource allocation), and capability upgrading (dynamic learning) -- have become...

  • Delivering ‘effortless experience’ across borders: Managing internal consistency in professional service firms Segal-Horn, Susan; Dean, Alison // Journal of World Business;Jan2009, Vol. 44 Issue 1, p41 

    Abstract: This article explores how professional service firms (PSFs) manage across borders. When clients require consistent services delivered across multiple locations, especially across borders, then firms need to develop an organization that is sufficiently flexible to be able to support...

  • Entrepreneurial contexts and knowledge coordination within the multinational corporation Williams, Christopher; Lee, Soo Hee // Journal of World Business;Apr2011, Vol. 46 Issue 2, p253 

    Abstract: We present a new perspective on entrepreneurship within multinational corporations (MNCs) based on entrepreneurial contexts and knowledge coordination. First, we develop a framework of four contexts for analyzing different mechanisms by which MNCs pursue opportunities across borders....


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics