MNE subsidiaries versus domestic enterprises: an analysis of their ownership and location-specific advantages
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).
Volume (Year): 35 (2003)
Issue (Month): 13 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/RAEC20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RAEC20|
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.:
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- Willmore, Larry N., 1986. "The comparative performance of foreign and domestic firms in Brazil," World Development, Elsevier, vol. 14(4), pages 489-502, April.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- Grubaugh, Stephen G, 1987. "Determinants of Direct Foreign Investment," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 149-52, February.
- Jean-François 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.
- 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.
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 references are entirely missing, you can add them using this form.