Much ado about nothing, or sirens of a brave new world? MNE activity from developing countries and its significance for development

Narula, Rajneesh (2010). Much ado about nothing, or sirens of a brave new world? MNE activity from developing countries and its significance for development. UNU-MERIT.

Document type:
Report

Metadata
Documents
Versions
Statistics
  • Attached Files (Some files may be inaccessible until you login with your UNU Collections credentials)
    Name Description MIMEType Size Downloads
    wp2010-021.pdf PDF application/pdf 361.12KB
  • Author Narula, Rajneesh
    Title Much ado about nothing, or sirens of a brave new world? MNE activity from developing countries and its significance for development
    Publication Date 2010
    Publisher UNU-MERIT
    Abstract This paper examines the evidence on developing country MNEs and outward FDI activity. We do not find evidence of an across-the-board growth in outward FDI from developing countries, either in magnitude, or geographically. Such growth is a narrow phenomenon, limited to a small group of home countries with relatively well-developed knowledge infrastructure, as well as innovation and business systems. These ‘new’ MNEs have been spurred by greater competition through liberalisation, and have sought to survive by upgrading of their firm-specific assets and one means to do so has been by internationalisation. Broadly speaking, much of the rapid expansion of DC MNE activity from countries such as India is not sustainable. We also discuss the effect of outward FDI on the knowledge base of the home countries of DC MNEs, as well as the role of DC MNEs in promoting South-South capital and knowledge flows. We argue that DC MNEs are not a superior option to conventional MNEs, as there are few differences in their modus operandi. Besides, MNE-assisted development still depends upon the capacity of the host country to efficiently utilise the spillovers and linkages potentially made available. Many of the DC host countries have endemic political instability, poor transport links and infrastructure, little skilled manpower and are distant from the most important markets. If developing countries are to attract more sophisticated projects they must provide stability, human capital, infrastructure and reliability.
    Keyword FDI
    MNEs
    Developing countries
    Development
    Absorptive capacity
    Knowledge flows
    South-South
    Emerging markets
    JEL F23
    L52
    O14
    O19
    Copyright Holder UNU-MERIT
    Copyright Year 2010
    ISSN 1871-9872
  • Versions
    Version Filter Type
  • Citation counts
    Google Scholar Search Google Scholar
    Access Statistics: 500 Abstract Views, 99 File Downloads  -  Detailed Statistics
    Created: Wed, 11 Dec 2013, 16:47:40 JST