Transnational Corporations (TNCs) have played a vital role in fostering rapid industrialisation in many developing countries. The Philippines is the case. However, the country has been far lagging behind other ASEAN members in economic performance. The present study examines this issue, mainly focusing on the linkage formation between TNCs affiliates and Philippine local suppliers. Three factors are proposed to determine the overall performance of linkage formation; i.e., outsourcing strategies of TNCs’ local affiliates, local entrepreneurial response, and host government policies. An economic enclave structure is clearly identified in the Philippines, in which only a few locally-owned suppliers have emerged.　Extremely weak local entrepreneurship in the Philippines is identified to explain the poor performance of linkage formation.
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Paper provided by Institute of Developing Economies, Japan External Trade Organization(JETRO) in its series IDE Discussion Papers with number
167.
Length: Date of creation: Sep 2008 Date of revision: Publication status: Published in IDE Discussion Paper. No. 167. 2008.9 Handle: RePEc:jet:dpaper:dpaper167
Find related papers by JEL classification: F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
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