Advanced Search
MyIDEAS: Login to save this article or follow this journal

MNE subsidiaries versus domestic enterprises: an analysis of their ownership and location-specific advantages

Contents:

Author Info

  • George Anastassopoulos
Registered author(s):

    Abstract

    This paper compares the ownership advantages of multinational enterprises' (MNEs) subsidiaries and domestic enterprises (DMEs) in Greece. Previous studies have tested the hypothesis that ownership-specific advantages (Oa) are a major source of firm differences. This study analyses the processed food sector (SIC=20) - the leading industrial sector in Greece with the highest inward and outward internationalization degree - using a panel data set of 75 firms and 5 years. The findings of a probabilistic regression analysis indicate that there are significant differences between the two groups of firms in the degree of possession of observed ownership advantages. MNE subsidiaries have higher market shares, use multiplant operations and have higher advertising and R&D to sales ratios compared to DMEs. DMEs use their well-established position (knowledge of domestic and regional market conditions, and size economies) in order to compete effectively with MNE subsidiaries. It is inferred that pursuit of domestic market development is an important motivation in such subsidiaries, in an attempt to build on (rather than substitute for) the strong and distinctive established product base of Greek food industry companies. By assimilating Greek food knowledge alongside their own the MNEs developed export-orientation into their subsidiaries in Greece, which eventually have played a notable role in the regional market (Balkans).

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.tandfonline.com/doi/abs/10.1080/0003684032000095956
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Applied Economics.

    Volume (Year): 35 (2003)
    Issue (Month): 13 ()
    Pages: 1505-1514

    as in new window
    Handle: RePEc:taf:applec:v:35:y:2003:i:13:p:1505-1514

    Contact details of provider:
    Web page: http://www.tandfonline.com/RAEC20

    Order Information:
    Web: http://www.tandfonline.com/pricing/journal/RAEC20

    Related research

    Keywords:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Jean-Fran├žois Hennart, 1991. "The Transaction Costs Theory of Joint Ventures: An Empirical Study of Japanese Subsidiaries in the United States," Management Science, INFORMS, vol. 37(4), pages 483-497, April.
    2. Hughes, John S. & Logue, Dennis E. & Sweeney, Richard James, 1975. "Corporate International Diversification and Market Assigned Measures of Risk and Diversification," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 10(04), pages 627-637, November.
    3. Peter J Buckley & John H Dunning, 1976. "The Industrial Structure of U.S. Direct Investment in the U.K," Journal of International Business Studies, Palgrave Macmillan, vol. 7(2), pages 5-14, June.
    4. Lall, Sanjaya, 1980. "Monopolistic Advantages and Foreign Involvement by U.S. Manufacturing Industry," Oxford Economic Papers, Oxford University Press, vol. 32(1), pages 102-22, March.
    5. Thomas A. Pugel, 1981. "The determinants of foreign direct investment: An analysis of US manufacturing industries," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 2(4), pages 220-228, December.
    6. Lall, Sanjaya & Siddharthan, N S, 1982. "The Monopolistic Advantages of Multinationals: Lessons from Foreign Investment in the U.S," Economic Journal, Royal Economic Society, vol. 92(367), pages 668-83, September.
    7. James R. Markusen, 1995. "The Boundaries of Multinational Enterprises and the Theory of International Trade," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 169-189, Spring.
    8. Traill, Bruce & da Silva, Joao Gomes, 1996. "Measuring international competitiveness: The case of the European food industry," International Business Review, Elsevier, vol. 5(2), pages 151-166, April.
    9. Donald J Lecraw, 1983. "Performance of Transnational Corporations in Less Developed Countries," Journal of International Business Studies, Palgrave Macmillan, vol. 14(1), pages 15-33, March.
    10. Willmore, Larry N., 1986. "The comparative performance of foreign and domestic firms in Brazil," World Development, Elsevier, vol. 14(4), pages 489-502, April.
    11. Breusch, T S & Pagan, A R, 1979. "A Simple Test for Heteroscedasticity and Random Coefficient Variation," Econometrica, Econometric Society, vol. 47(5), pages 1287-94, September.
    12. Alan Rugman, 1980. "Internalization as a general theory of foreign direct investment: A re-appraisal of the literature," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 116(2), pages 365-379, June.
    13. Ruth Rama, 1996. "Empirical study on sources of innovation in international food and beverage industry," Agribusiness, John Wiley & Sons, Ltd., vol. 12(2), pages 123-134.
    14. Dunning, John H, 1979. "Explaining Changing Patterns of International Production: In Defence of the Eclectic Theory," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 41(4), pages 269-95, November.
    15. Caves, Richard E, 1974. "Causes of Direct Investment: Foreign Firms' Shares in Canadian and United Kingdom Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 56(3), pages 279-93, August.
    16. Grubaugh, Stephen G, 1987. "Determinants of Direct Foreign Investment," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 149-52, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Keshari, Pradeep Kumar, 2013. "Comparative performance of foreign affiliates and domestic firms in the Indian machinery industry," MPRA Paper 33076, University Library of Munich, Germany, revised 20 Apr 2013.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:35:y:2003:i:13:p:1505-1514. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.