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From Quantity to Quality: Challenges for Investment Promotion Agencies

Author

Listed:
  • Filippov, Sergey

    (UNU-MERIT and Technical University Delft)

  • Guimon, Jose

    (Department of Economic Structure and Development Economics, Universidad Autonoma de Madrid)

Abstract

Most investment promotion agencies worldwide are now placing a higher emphasis on attracting high "quality" FDI, including R&D centers and headquarter functions as well as knowledgeintensive industries such as information and communication technologies, biotechnology or nanotechnology. We argue that this requires a different approach than policies focused on the "quantity" of FDI inflows, leading to changes in the policy mix and in the approach to performance measurement. Targeting quality entails a shift from a mindset that prioritizes attraction of greenfield investments towards one where the focus is on subsidiary development. Another implication is that the interplay between FDI policies and innovation policies becomes more relevant and needs to be further nurtured. We focus on the management challenges that investment promotion agencies face in this transition from quantity to quality, drawing attention to the consequences for their human capital, structural capital and relational capital strategies.

Suggested Citation

  • Filippov, Sergey & Guimon, Jose, 2009. "From Quantity to Quality: Challenges for Investment Promotion Agencies," MERIT Working Papers 2009-057, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2009057
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    References listed on IDEAS

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    3. Jaap Voeten & Job de Haan & Gerard de Groot, 2009. "Is that Innovation?: Assessing Examples of Revitalized Economic Dynamics among Clusters of Small Producers in Northern Vietnam," WIDER Working Paper Series RP2009-53, World Institute for Development Economic Research (UNU-WIDER).
    4. Jindra, Björn & Giroud, Axèle & Scott-Kennel, Joanna, 2009. "Subsidiary roles, vertical linkages and economic development: Lessons from transition economies," Journal of World Business, Elsevier, vol. 44(2), pages 167-179, April.
    5. Julian Birkinshaw, 1997. "Entrepreneurship In Multinational Corporations: The Characteristics Of Subsidiary Initiatives," Strategic Management Journal, Wiley Blackwell, vol. 18(3), pages 207-229, March.
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    Cited by:

    1. Rasheed Sulaiman V. & Laxmi Thummuru & Hall, Andy & Dijkman, Jeroen, 2009. "Tacit Knowledge and Innovation Capacity: Evidence from the Indian Livestock Sector," MERIT Working Papers 2009-058, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. World Bank Group, 2020. "Global Investment Competitiveness Report 2019/2020," World Bank Publications - Books, The World Bank Group, number 33808.
    3. Slavo Radosevic & Katerina Ciampi Stancova, 2018. "Internationalising Smart Specialisation: Assessment and Issues in the Case of EU New Member States," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 9(1), pages 263-293, March.

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    More about this item

    Keywords

    Aftercare; FDI; intellectual capital; investment promotion; R&D; subsidiary development;
    All these keywords.

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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