Productivity growth and functional upgrading in foreign subsidiaries in the Slovenian manufacturing sector (original) (raw)

2005, East-West Journal of Economics and Business

Abstract

The paper discusses the determinants of productivity growth in manufacturing foreign subsidiaries in Slovenia. Special attention is given to the impact of control pattern. Using the standard growth accounting approach we show that productivity growth is significantly and positively correlated with the level of foreign parent companies' control of marketing and strategic business functions. Larger subsidiaries and subsidiaries with higher exports to sales ratio also experience higher changes in the productivity level. Subsidiaries in high ...

Loading...

Loading Preview

Sorry, preview is currently unavailable. You can download the paper by clicking the button above.

References (36)

  1. Andersson, U. and M. Forsgren, 2000, In Search of Centre of Excellence: Network Embeddedness and Subsidiary Roles in Multinational Corporations, Management International Review 40 (4): 329-350.
  2. Balasubramanyam, V. N., Salisu, M. and D. Sapsford, 1996, Foreign direct investment and growth in EP and IS countries, The Economic Journal 106 (434): 92-105.
  3. Barrell, R. and N. Pain, 1997, Foreign direct investment, technological change, and economic growth within Europe, The Economic Journal 107 (445): 1770-86.
  4. Barlett, C. and S. Ghoshal, 1986, Tap your subsidiaries for global reach, Harvard Business Review November: 87-94.
  5. Bartlett, C.A. and S. Ghoshal, 1989, Managing Across Borders: The transnational solution, Boston: HBS Press.
  6. Birkinshaw, J., 2001, Strategy and management in MNE subsidiaries, In: The Oxford Handbook of International Business (Rugman A. M. and T. Brewer, eds), Oxford: Oxford University Press, pp. 380-401.
  7. Birkinshaw J., Hood, N. and S. Jonsson, 1998, Building firm-specific advantages in multinational corporations: The role of subsidiary initiative, Strategic Management Journal 31: 141-54.
  8. Birkinshaw, J. and N. Hood (eds), 1998, Multinational Corporate Evolution and Subsidiary Development, London: Macmillan.
  9. Craig, C. S. and S. P. Douglas, 1997, Managing transnational value Chain - Strategies for Firms from Emerging Markets, Journal of International Marketing 5 (3): 74-84.
  10. Damijan, J. P. and M. Rojec, 2004, Foreign direct investment and the catching-up process in new EU member states: Is there a flying geese pattern?, WIIW Research Reports No. 310, The Vienna Institute for International Economic Studies, Vienna.
  11. Damijan, J. P., Majcen, B., Rojec, M. and M. Knell, 2003, The role of FDI, R&D accumulation and trade in transferring technology to transition countries: evidence from firm panel data for eight transition countries, Economic Systems 27 (2): 189-204.
  12. De Mello, L. R., 1996, Foreign direct investment-led growth: evidence from time series and panel data, Oxford Economic Papers 51 (1), 133-51.
  13. De Mello, L. R., 1997, Foreign direct investment in developing countries and growth: a selective survey, The Journal of Development Studies 34 (1), 1- 34.
  14. Dimelis, S. and H. Louri, 2002, Foreign ownership and production efficiency: A quantile regression analysis, Oxford Economic Papers 54 (3): 449-69.
  15. Gorg, H. and D. Greenaway, 2002, Foreign direct investment and intra- industry spillovers, UNECE, Geneva, www.unece.org/ead/ffd.htm
  16. Holland, D., Sass, M., Benaček, V. and M. Gronicki, 2000, The determinants and impact of FDI in Central and Eastern Europe: a comparison of survey and econometric evidence, Transnational Corporations 9 (3): 163-213.
  17. Hunya, G. (ed.), 2000, Integration through Foreign Direct Investment, Cheltenham: Edward Elgar.
  18. Jensen, C., 2002, Spillovers in the Polish food industry -exploring the role of local externalities and global networks, Working paper No. 14, Centre for East European Studies, Copenhagen Business School, Copenhagen.
  19. Jindra, B., 2006, Empirical studies: approaches, methodological problems and findings, In: Technology Transfer via Foreign Direct Investment in Central and Eastern Europe (Stephan, J., ed.), London: Palgrave Macmillan, pp. 30- 71.
  20. Konings, J., 2001, The effects of FDI on domestic firms, Economics of Transition 9 (5): 619-33.
  21. Majcen, B., Radošević, S. and M. Rojec, 2003, Strategic Control and Productivity Growth of Foreign Subsidiaries in Central European Countries, XI International Conference on European Studies, Havana, September 30 - October 3 2003, mimeo.
  22. Meyer, K., 1998, Direct Investment in Economies in Transition: Making Central European Industries Competitive, Cheltenham: Edward Elgar.
  23. Navaretti, B. and A. Venables, 2004, Multinationals and the world economy. Princeton: Princeton University Press.
  24. OECD, 2002, Foreign Direct Investment for Development: Maximising Benefits, Minimising Costs, Paris: OECD:
  25. Ozawa, T. and S. Castello, 2001, Multinational companies and endogenous growth: An eclectic -paradigmatic approach, Working Paper No. 27, Economics series, East -West Center, Honolulu.
  26. Penrose, E.T., 1959, The Theory of the Growth of the Firm, Oxford: Basil Blackwell.
  27. Porter, M.E., Sachs, J.D., Cornelius, P.K., McArthur, J.W. and K. Schwab, 2002, World Competitiveness Report 2001-2002, New York: Oxford University Press.
  28. Resmini, L., 2000, The determinants of foreign direct investment in the CEECs: New evidence form sectoral patterns, Economics of Transition 8 (3): 665- 89.
  29. Rojec, M., 2000, Restructuring and efficiency upgrading with FDI, In: Integration through Foreign Direct Investment: Making Central European Industries Competitive (Hunya, G., ed.), Cheltenham: Edward Elgar, pp. 130-149.
  30. Rojec, M, Damijan, J.P. and B. Majcen, 2000, Export Propensity of Foreign Subsidiaries in Slovenian Manufacturing Industry, Globalisation and European Integration, 6 th EACES Conference, Barcelona, 7-9 September 2000, mimeo.
  31. Roth, K. and A. J. Morrison, 1992, Implementing global strategy: characteristics of global subsidiary mandates, Journal of International Business Studies 23 (4): 715-35.
  32. Smarzynska Javorcik, B., 2004, Does foreign direct investment increases productivity of domestic firms? In search of spillovers through backward linkages, American Economic Review 94 (3): 605-27.
  33. Szalavetz, A., 2000, Adjustment of Hungarian engineering companies to the globalising corporate network, In: Small Economies' Adjustment to Global Challenges (Bara, Z. and L. Csaba, eds), Budapest: Aula Publishing Ltd, pp. 357-376.
  34. Tavares, A. T., 1999, Modelling the Impact of Economic Integration on Multinational's Strategies, University of Reading Discussion Papers in International Investment and Management, No. 254, University of Reading, Reading.
  35. White, R.E. and T.A. Poynter, 1984, Strategies for foreign owned subsidiaries in Canada, Business Quarterly (Summer): 59-69.
  36. Young, S., Hood, N. and S. Dunlop, 1988, Global strategies, multinational subsidiary roles and economic impact in Scotland, Regional Studies 22 (6): 487-97.