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Multinational Enterprises, Development and Globalization: Some Clarifications and a Research Agenda

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  • Rajneesh Narula
  • John Dunning

Abstract

This paper considers how economic globalization has affected opportunities and challenges for developing countries in following a multinational enterprise (MNE)-assisted development strategy, revisiting an earlier article by the authors. The growing share of industrial activity owned and/or controlled by MNEs has not—by and large—led to a proportional increase in sustainable domestic industrial growth. Particular attention is paid to how MNEs have responded proactively to globalization by modifying their strategies, spatial organization and the modalities by which they interact with host economic actors, and how these changes alter our understanding of MNEs and development. What has been learnt over the last decade about embeddedness, institutions, inertia, absorptive capacity, spillovers and linkages, and how they can explain the success of some countries (or regions) in promoting growth, and the failure of others, is examined. The need to link MNE and industrial policies systematically is highlighted. Attracting the “right kinds” of MNE activity remains important, but greater heterogeneity of MNE activity and host locations requires greater customization of policy tools.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Oxford Development Studies.

Volume (Year): 38 (2010)
Issue (Month): 3 ()
Pages: 263-287

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Handle: RePEc:taf:oxdevs:v:38:y:2010:i:3:p:263-287

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Citations

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Cited by:
  1. Pradeep Kumar Keshari, 2011. "Efficiency Spillovers from FDI in the Indian Machinery Industry: A Firm Level Study Using Panel Data Models," Working Papers id:4195, eSocialSciences.
  2. Paulo Figueiredo & Klauber Brito, 2011. "The innovation performance of MNE subsidiaries and local embeddedness: evidence from an emerging economy," Journal of Evolutionary Economics, Springer, vol. 21(1), pages 141-165, February.
  3. Narula, Rajneesh & Nguyen, Quyen T.K., 2011. "Emerging country MNEs and the role of home countries: separating fact from irrational expectations," MERIT Working Papers 021, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  4. José Guimón* & Sergey Filippov, 2012. "Competing for High-quality FDI: Management Challenges for Investment Promotion Agencies," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 4(2), pages 25-44, July.
  5. Giroud, Axèle & Jindra, Björn & Marek, Philipp, 2012. "Heterogeneous FDI in Transition Economies – A Novel Approach to Assess the Developmental Impact of Backward Linkages," World Development, Elsevier, vol. 40(11), pages 2206-2220.
  6. Narula, Rajneesh & Prasad Kodiyat, Tiju, 2013. "The growth of outward FDI and the competitiveness of the underlying economy: the case of India," MERIT Working Papers 042, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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