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FDI Effects on National Competitiveness: A Cluster Approach

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  • Philippe Gugler
  • Serge Brunner

Abstract

Despite the close relationship between the activities of multinational enterprises (MNEs) and the competitiveness of host countries, few studies have linked these two subjects from a global perspective. Combining Porter’s approach and the work accomplished by international business economists provides a powerful analytical tool with which to review the recent empirical and theoretical literature on the effects of foreign direct investment (FDI) on national competitiveness. The contention is that FDI can indeed be a source of competitiveness but that previous studies have neglected the role of location, in particular the role of clustering on the absorptive capacity of the host State. The aim of this paper is to provide a comprehensive conceptual framework for assessing the effects of FDI on competitiveness to guide policy-makers as well as further research. Copyright International Atlantic Economic Society 2007

Suggested Citation

  • Philippe Gugler & Serge Brunner, 2007. "FDI Effects on National Competitiveness: A Cluster Approach," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 13(3), pages 268-284, August.
    • Handle: RePEc:kap:iaecre:v:13:y:2007:i:3:p:268-284:10.1007/s11294-007-9091-1
    DOI: 10.1007/s11294-007-9091-1
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    2. Yasser Al-Saleh, 2018. "Crystallising the Dubai model of cluster-based development," Place Branding and Public Diplomacy, Palgrave Macmillan, vol. 14(4), pages 305-317, November.
    3. Dirk Clercq & Jolanda Hessels & André Stel, 2008. "Knowledge spillovers and new ventures’ export orientation," Small Business Economics, Springer, vol. 31(3), pages 283-303, October.
    4. Taganov, Boris, 2014. "FDI and long-term economic growth in Russia," EconStor Preprints 122049, ZBW - Leibniz Information Centre for Economics.
    5. Gugler Philippe, 2019. "Assessing the competitiveness of locations: A journey through the major theoretical insights," Economics and Business Review, Sciendo, vol. 5(3), pages 16-34, September.
    6. David Hanrahan, 2021. "Digitalization as a Determinant of Tax Revenues in OECD Countries: A Static and Dynamic Panel Data Analysis," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 7(4), pages 321-348, October.
    7. Fetscherin, Marc & Voss, Hinrich & Gugler, Philippe, 2010. "30 Years of foreign direct investment to China: An interdisciplinary literature review," International Business Review, Elsevier, vol. 19(3), pages 235-246, June.
    8. Sultana, Nasrin & Turkina, Ekaterina, 2020. "Foreign direct investment, technological advancement, and absorptive capacity: A network analysis," International Business Review, Elsevier, vol. 29(2).
    9. Alina Petronela Alexoaei, 2020. "The relevance of national competitiveness for the entrepreneurial environment," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 23(77), pages 64-76, September.
    10. Castro-Gonzáles, Segundo & Peña-Vinces, Jesús C. & Guillen, Jorge, 2016. "The competitiveness of Latin-American economies: Consolidation of the double diamond theory," Economic Systems, Elsevier, vol. 40(3), pages 373-386.
    11. Katarina Blomkvist & Rian Drogendijk, 2013. "The Impact of Psychic Distance on Chinese Outward Foreign Direct Investments," Management International Review, Springer, vol. 53(5), pages 659-686, October.
    12. Ángeles Castro Gerardo & Ramírez Camarillo Diana Berenice, 2014. "Determinants of tax revenue in OECD countries over the period 2001-2011," Contaduría y Administración, Accounting and Management, vol. 59(3), pages 35-60, julio-sep.
    13. Xiang Wang & Chang-Franw Lee & Jiabei Jiang & Xiaoyang Zhu, 2023. "Discussion on Sustainable Development Strategy of China’s Rehabilitation Assistive Device Industry Based on Diamond Model," Sustainability, MDPI, vol. 15(3), pages 1-24, January.
    14. Liu, Bih Jane, 2011. "MNEs and Local Linkages: Evidence from Taiwanese Affiliates," World Development, Elsevier, vol. 39(4), pages 633-647, April.
    15. Jankowska, Barbara & Götz, Marta & Tarka, Piotr, 2021. "Foreign subsidiaries as vehicles of industry 4.0: The case of foreign subsidiaries in a post-transition economy," International Business Review, Elsevier, vol. 30(6).
    16. Yeltsin Tafur & Eric Lilford & Roberto F. Aguilera, 2022. "Assessing the risk of foreign investment within the petroleum sector of South America," SN Business & Economics, Springer, vol. 2(6), pages 1-32, June.

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    More about this item

    Keywords

    FDI; MNE; Competitiveness; Cluster; Investment policy; L50; O10; R10;
    All these keywords.

    JEL classification:

    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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