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States and Firms on the Periphery: The Challenges of a Globalising World

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  • Benito, Gabriel

    () (BI Norwegian School of Management)

  • Narula, Rajneesh

    () (University of Reading Business School)

Abstract

A key feature of globalisation has been the growth and spread of multinational enterprises (MNEs), but there is here is considerable evidence that MNEs do not regard all locations as being equivalent. MNE activity both to and from peripheral economies differs from MNE activity associated with core economies. We discuss how and why multinational enterprises may differ in their investment behaviour from and to peripheral economies, from the point of view of both states and firms. We also provide an overview of the policy issues associated with the peripheral nature of these economies per se, as well of the policy issues associated with MNEs that invest into and from peripheral economies. Inter alia, we argue that market forces cannot fully substitute for the role of governments in developing and promoting a proactive industrial policy.

Suggested Citation

  • Benito, Gabriel & Narula, Rajneesh, 2007. "States and Firms on the Periphery: The Challenges of a Globalising World," MERIT Working Papers 004, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:unumer:2007004
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    File URL: https://www.merit.unu.edu/publications/wppdf/2007/wp2007-004.pdf
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    References listed on IDEAS

    as
    1. Gabriel R. G. Benito, 2005. "Divestment and international business strategy," Journal of Economic Geography, Oxford University Press, vol. 5(2), pages 235-251, April.
    2. Fosfuri, Andrea & Motta, Massimo & Ronde, Thomas, 2001. "Foreign direct investment and spillovers through workers' mobility," Journal of International Economics, Elsevier, vol. 53(1), pages 205-222, February.
    3. Masahisa Fujita & Jacques-François Thisse, 2003. "Does Geographical Agglomeration Foster Economic Growth? And Who Gains and Loses from It?," The Japanese Economic Review, Japanese Economic Association, vol. 54(2), pages 121-145.
    4. Lecraw, Donald J, 1977. "Direct Investment by Firms from Less Developed Countries," Oxford Economic Papers, Oxford University Press, vol. 29(3), pages 442-457, November.
    5. Lall, Sanjaya & Narula, Rajneesh, 2004. "FDI and its role in economic development: Do we need a new agenda?," Research Memorandum 019, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    6. Rajneesh Narula & John Dunning, 2000. "Industrial Development, Globalization and Multinational Enterprises: New Realities for Developing Countries," Oxford Development Studies, Taylor & Francis Journals, vol. 28(2), pages 141-167.
    7. G R G Benito & B Grøgaard & R Narula, 2003. "Environmental influences on MNE subsidiary roles: economic integration and the Nordic countries," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 34(5), pages 443-456, September.
    8. Cantwell, John, 1995. "The Globalisation of Technology: What Remains of the Product Cycle Model?," Cambridge Journal of Economics, Oxford University Press, vol. 19(1), pages 155-174, February.
    9. Rikard Forslid & Ian Wooton, 2003. "Comparative Advantage and the Location of Production," Review of International Economics, Wiley Blackwell, vol. 11(4), pages 588-603, September.
    10. Constantina Kottaridi, 2005. "The 'core-periphery' pattern of FDI-led growth and production structure in the EU," Applied Economics, Taylor & Francis Journals, vol. 37(1), pages 99-113.
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    Cited by:

    1. Narula, Rajneesh & Guimon, Jose, 2010. "The R&D activity of multinational enterprises in peripheral economies: evidence from the EU new member states," MERIT Working Papers 048, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Antonios Georgopoulos & Felicitas Nowak-Lehmann D. & Vasilios Sogiakas, 2013. "Survival Characteristics and Adjustment of MNE Affiliates in the European Integrated Market," Ibero America Institute for Econ. Research (IAI) Discussion Papers 225, Ibero-America Institute for Economic Research.
    3. Narula, Rajneesh & Verbeke, Alain, 2015. "Making internalization theory good for practice: The essence of Alan Rugman's contributions to international business," Journal of World Business, Elsevier, vol. 50(4), pages 612-622.

    More about this item

    Keywords

    Multinational Enterprises; Foreign Direct Investment; Industrial Policy; Organizational Behavior;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights

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