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Taking Actively Advantage of MNCs’ Presence

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  • Chiara Guardo
  • Giovanni Valentini

Abstract

In this paper, not only do we posit that the presence of a multinational corporation may entail significant benefits for the host economy and local firms’ performance, but also that these benefits can be actively sought and dynamically reinforced by local firms through the development of intense, embedded customer–supplier relationships. Building on the relational view, we argue that this may happen through the commitment of resources to relation-specific investments. Our hypotheses find support in a sample of SMEs suppliers of ST Microelectronics, the fourth largest producer of microelectronic components in the world. We show that by making relation-specific investments, local firms can grow quantitatively and qualitatively, improve their innovativeness, and acquire new clients. Copyright Springer 2007

Suggested Citation

  • Chiara Guardo & Giovanni Valentini, 2007. "Taking Actively Advantage of MNCs’ Presence," Small Business Economics, Springer, vol. 28(1), pages 55-68, January.
    • Handle: RePEc:kap:sbusec:v:28:y:2007:i:1:p:55-68
    DOI: 10.1007/s11187-005-6708-8
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    More about this item

    Keywords

    Relational View; Spillovers; Firms; Growth; Effects of FDI; F23; L14; M10;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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