The relationship between internationalisation and innovation:internationalisation strategies, foreign firms', patenting behaviour and FDI spillovers

This thesis aims to contribute to the understanding of the relationships between internationalisation and innovation. Based on large comprehensive firm level data from China, this thesis comprises of three empirical chapters examining internationalisation from different aspects. Specifically, the first empirical work studies how firms internationalise. It links the choice of firms’ internationalisation strategies with firm characteristics. Additionally, it re-examines the stepwise internationalisation theory by distinguishing different foreign direct investment (FDI) motives. It proposes two pecking orders of firm performance in internationalisation strategies. The second empirical study investigates what kind of innovation activities internationalised firms do. It analyses the factors that drive foreign firms to patent in an emerging host country context. It stresses the importance of the intellectual property rights protection aspect of business environment at regional level in promoting patents, the role of industry dependence on external finance in shaping foreign firms’ patenting behaviour, as well as links foreign firms’ patent production with FDI motivation. The third empirical research examines the effect of internationalisation by examining the links between inward FDI and domestic innovation in a host country. It specifically examines technology spillovers from inward FDI through the direct lens of innovation (captured by grant patents), instead of adopting the indirect productivity approach widely employed by the literature. Distinguishing different types of innovation, it provides direct evidence of heterogeneous innovation spillovers from FDI.

Spillovers from FDI and local networks:the importance of transactional linkages and vertical keiretsu in Japan

Purpose – The purpose of this paper is to explore the importance of host country networks and organisation of production in the context of international technology transfer that accompanies foreign direct investment (FDI). Design/methodology/approach – The empirical analysis is based on unbalanced panel data covering Japanese firms active in two-digit manufacturing sectors over a seven-year period. Given the self-selection problem affecting past sectoral-level studies, using firm-level panel data is a prerequisite to provide robust empirical evidence. Findings – While Japan is thought of as being a technologically advanced country, the results show that vertical productivity spillovers from FDI occur in Japan, but they are sensitive to technological differences between domestic firms and the idiosyncratic Japanese institutional network. FDI in vertically organised keiretsu sectors generates inter-industry spillovers through backward and forward linkages, while FDI within sectors linked to vertical keiretsu activities adversely affects domestic productivity. Overall, our results suggest that the role of vertical keiretsu is more prevalent than that of horizontal keiretsu. Originality/value – Japan’s industrial landscape has been dominated by institutional clusters or networks of inter-firm organisations through reciprocated, direct and indirect ties. However, interactions between inward investors and such institutionalised networks in the host economy are seldom explored. The role and characteristics of local business groups, in the form of keiretsu networks, have been investigated to determine the scale and scope of spillovers from inward FDI to Japanese establishments. This conceptualisation depends on the institutional mechanism and the market structure through which host economies absorb and exploit FDI.

A critical reflection on Irish industrial policy:a strategic choice approach

Abstract: This paper offers a critical evaluation of recent Irish industrial policy (IP) experience. It argues that whilst Ireland managed to get some things “right” through its IP, substantial tensions arose through making foreign direct investment (FDI) attraction the centrepiece of policy, without at the same time adopting a more holistic approach in IP which inter alia also placed an emphasis on indigenous firms and entrepreneurship more generally. In particular, greater efforts should have been made much earlier in attempting to embed transnational corporation (TNC)-led activity better into the wider economy, in fostering domestic small firms and entrepreneurship, in promoting clusters, and more generally in evaluating IP more fully – notwithstanding the context which mitigated against such actions. As a result, Ireland as an economy remained vulnerable to strategic decisions made elsewhere by TNC decision makers, with IP effectively contributing to a situation that can be characterised as institutional and strategic failure. Overall, the paper suggests that wholesale emulation of the Irish IP approach is problematic.

Industry–academic links:a new phase in Ireland’s FDI-led industrialisation strategy

We analyse industry–academic links in the context of a dual economy (or disarticulated industrial structure) in Ireland, as an example of a peripheral territory in the EU. The duality found in the Irish industrial structure is the result of a FDI-led industrialisation strategy which has resulted in two distinct economic sectors – foreign and indigenous, respectively – with weak interactions between the two. Through increased public funding of academic research, the Irish government aimed to attract and embed new waves of higher-value foreign direct investment and increase the dynamism of its indigenous enterprise base. Based on a combination of quantitative and qualitative data, the paper analyses a crucial aspect of Ireland’s recent emphasis on STI policy – industry-academic linkages – and finds that the measures introduced reproduce in the public research system the uneven development found in Ireland’s productive system between indigenous industry and the foreign-owned industrial base.

Tőkebefektetések Magyarországon = Capital investments in Hungary

A tanulmány megvizsgálja Magyarország integrációs kapcsolatainak alakulását a tőkebefektetések területén, feltárja annak pozitív és negatív hatásait. Az 1990-től 2010-ig tartó periódust három fő szakaszban elemzi, ezek a szakaszok: a rendszerváltás ideje, az EU csatlakozásig, valamint a csatlakozás óta eltelt évek. Kitér a tanulmány arra, hogy a hét évvel ezelőtti uniós csatlakozás hogyan hatott a tőkebefektetések alakulására, az integráció előtti kapcsolatok milyen mértékben maradtak fent, illetve változtak, mennyire vagyunk nyitottak a külföldi tőke előtt és a 2008-ban kezdődő gazdasági világválság milyen hatással volt ezekre a folyamatokra. / === / The purpose of the study is to examine the standing of Hungary's relations within the integration especially focusing on foreign direct investment, as well as to explore its positive and negative consequences. The period between 1990 and 2010 will be discussed in three main parts, namely as the time of the political transformation, the time preceding Hungary's accession to the European Union, and that of the years passed since then. Apart from the above mentioned it is also necessary to analyze the impact made by the integration which took place seven years ago on the state of foreign direct investment, and, to have a look at the relations formed prior to it, to see the extent to which they have altered or remained the same. We need to know how much our economy is open to foreign capital and we have to understand the measure Hungary has been affected by, since the crisis that began in 2008 has made itself plausible.

Az autóipar szerkezeti átrendeződése – Vállalati stratégiák és a válság hatásai (Structural change in the automotive industry – corporate strategies and the impact of the crisis)

Az írás a globális értékláncok élén álló autóipari cégek világgazdasági válságra adott reakcióit foglalja össze. Megállapítja, hogy a válságnak messze nincs vége: az iparág globális átrendeződése folytatódik. A globális értékláncokba sikeresen betagozódott közép-európai autóipari klaszter ezeknek a folyamatoknak mindmáig nyertese volt. Számolni kell azonban azzal, hogy továbbra is sok a technológiai és a piaci bizonytalanság: az új szereplők belépése, új üzleti modellek elterjedése hosszabb távon felboríthatja a jelenlegi status quo-t, és veszélyeztetheti a hagyományos autóipari befektetőiket munkabér-alapú versenyképességgel megtartani próbáló közép- és kelet-európai országok pozícióit. Az autóipari működő tőkét fogadó közép-kelet-európai országok számára hosszabb távon veszélyt jelenthet az autóipari üzleti modellek átalakulása, a gyártás teljes kiszervezése komplex gyártási szolgáltatást vállaló cégekhez, mivel ez esetben az értéklánc vezető vállalatai bezárhatják a régióban működő gyártóbázisaikat. Az értékláncok élén álló globális cégek „menekülés a minőségbe” stratégiája helyi szinten is követhető, követendő, a működő tőkét fogadó országok versenyképessége kizárólag a helyi leányvállalatok állandó „feljebb lépésével” tartható fenn. ______ This paper summarizes lead firms’ reactions to crisis in global automotive value chains. The paper advances five theses. Author argues that crisis is not over yet, the global restructuring of the industry continues. Actors in the CEE automotive cluster have successfully become integrated into global value chains and have thereby been the winners of past restructuring processes. Nevertheless, technological and market uncertainties prevail: entry of new economic actors and the diffusion of new business models may, in the long run, disrupt the current status quo and jeopardise the world economic position of CEE countries that have been relying solely on their labour cost advantages to sustain direct investment inflows in their automotive industries. In the long run the automotive industries of Central and Eastern European (CEE) economies may become threatened by the transformation of the prevailing automotive business model, the outsourcing of manufacturing and related support activities to complex manufacturing services providers, which could lead to the closure of lead firms’ manufacturing facilities in CEE. Lead firms’ increased focus on high quality high value adding activities strategy can and should be followed by local subsidiaries through a continuous strive for upgrading.

Transnational Capital and the Politics of Global Supply Chains

In the latest phase of globalization, transnational corporations based in the U.S. have worked closely with U.S. foreign policymakers to secure favorable foreign direct investment provisions within U.S. domestic legislation and within U.S. trade agreements. These interactions between transnational firms and the U.S. state have provided many of the preconditions for an expansion of foreign direct investment connected to capital liberalization and the growth of global supply chains from the 1980s to the present. This relationship is best conceptualized as representing a “transnational interest bloc,” whose policy objectives are incorporated within investment provisions in US-backed trade and investment agreements.

Restrição externa, dependência estrutural de commodities primárias e o investimento direto externo no Brasil

As the beginning of the discussion about the reprimarization process of the Brazilian exportations, or about a deindustrialization process of the country foreign sales, this study purpose that the discussion, actually, should be about the existence of the commodities structural dependence as a way to face the foreign restrictions. Therefore the intention is to show that, historically, the way that the Brazilian economy has crossed for its development depends of the foreign capital, mainly in its way of Foreign Direct Investment (FDI), and in the balance generated by the primary products, which make us try to understand the impact of this capital for the equilibrium of the Brazilian Payment Balance and also for the economy. These points were discussed not only based on the Brazilian classic writers as Francisco Oliveira, Caio Prado Jr. and Celso Furtado, but also using the newest studies which contributes to point the causes and consequences of the external capital dependence in the actual scenario. The conclusions acquired in the end of the study, indicates the fact that the Brazilian specialization in products of low aggregated value is not recent. Brazil is, historically, a competitive country in primary products. At the same time, the country importation always was a pressure factor of the National Payments Balance, being composed by products with more aggregated value. According to some authors, this characteristic of the Brazilian Economy will be surpassed with the economic opening process, which will attract external capital making possible the modernization of the Brazilian productive sector. Therefore, we can claim that the FDI, in the way it has been inserted in the country, does not offer the opportunity to get out of the commodities dependence, as generators of the payment balances, because the country international competitive standard didn t get any important changes, keeping itself out of the step related to the global standard which has been intensified in products with more aggregated value. The changes in the national insertion standard directed to more technological products is really important to surpass the historical scenario of commodities dependence, making the country less vulnerable to external crisis.

Financial media, globalisation, and China’s economic integration: comparing narrative construction of the Economist and Caijing

In June 2015, legal frameworks of the Asian Infrastructural Investment Bank were signed by its 57 founding members. Proposed and initiated by China, this multilateral development bank is considered to be an Asian counterpart to break the monopoly of the World Bank and the International Monetary Fund. In October 2015, China’s Central Bank announced a benchmark interest rate cut to combat the economic slowdown. The easing policy coincides with the European Central Bank’s announcement of doubts over US Fed’s commitment to raise interest rates. Global stock markets responded positively to China’s move, with the exception of the indexes from Wall Street (Bland, 2015; Elliott, 2015). In the meantime, China’s ‘One Belt, One Road’ (or New Silk Road Economic Belt) became atopic of discourse in relation to its growing global economy, as China pledged $40 billion to trade and infrastructure projects (Bermingham, 2015). The foreign policy aims to reinforce the economic belt from western China through Central Asia towards Europe, as well as to construct maritime trading routes from coastal China through the South China Sea (Summers, 2015). In 2012, The Economist launched a new China section, to reveal the complexity of the‘meteoric rise’ of China. John Micklethwait, who was then the chief editor of the magazine, said that China’s emergence as a global power justified giving it a section of its own(Roush, 2012). In July 2015, Hu Shuli, the former chief editor of Caijing, announced the launch of a think tank and financial data service division called Caixin Insight Group, which encompasses the new Caixin China Purchasing Managers Index (PMI). Incooperation with with Markit Group, a principal global provider of PMI, the index soon became a widely cited economic indicator. One anecdote from November’s Caixin shows how much has changed: in a high-profile dialogue between Hu Shuli and Kevin Rudd, Hu insisted on asking questions in English; interestingly, the former Prime Minister of Australia insisted on replying in Chinese. These recent developments point to one thing: the economic ascent of China and its increasing influence on the power play between economics and politics in world markets. China has begun to take a more active role in rule making and enforcement under neoliberal frameworks. However, due to the country’s size and the scale of its economy in comparison to other countries, China’s version of globalisation has unique characteristics. The ‘Capitalist-socialist’ paradox is vital to China’s market-oriented transformation. In order to comprehend how such unique features are articulated and understood, there are several questions worth investigating in the realms of media and communication studies,such as how China’s neoliberal restructuring is portrayed and perceived by different types of interested parties, and how these portrayals are de-contextualised and re-contextualised in global or Anglo-American narratives. Therefore, based on a combination of the themes of globalisation, financial media and China’s economic integration, this thesis attempts to explore how financial media construct the narratives of China’s economic globalisation through the deployment of comparative and multi-disciplinary approaches. Two outstanding elite financial magazines, Britain’s The Economist, which has a global readership and influence, and Caijing, China’s leading financial magazine, are chosen as case studies to exemplify differing media discourses, representing, respectively, Anglo-American and Chinese socio-economic and political backgrounds, as well as their own journalistic cultures. This thesis tries to answer the questions of how and why China’s neoliberal restructuring is constructed from a globally-oriented perspective. The construction primarily involves people who are influential in business and policymaking. Hence, the analysis falls into the paradigm of elite-elite communication, which is an important but relatively less developed perspective in studying China and its globalisation. The comparing of characteristics of narrative construction are the result of the textual analysis of articles published over a ten-year period (mid-1998 to mid-2008). The corpus of samples come from the two media outlets’ coverage of three selected events:China becoming a member of the World Trade Organization, its outward direct investment, and the listing of stocks of Chinese companies in overseas exchanges, which are mutually exclusive in sample collection and collectively exhaustive in the inclusion of articles regarding China’s economic globalisation. The findings help to understand that, despite language, socio-economic and political differences, elite financial media with globally-oriented readerships share similar methods of and approaches to agenda setting, the evaluation of news prominence, the selection of frame, and the advocacy of deeply rooted neoliberal ideas. The comparison of their distinctive features reflects the different phases of building up the sense of identity in their readers as global elites, as well as the different economic interests that are aligned with the corresponding readerships. However, textual analysis is only relevant in terms of exploring how the narratives are constructed and the elements they include; textual analysis alone prevents us from seeing the obstacles and the constrains of the journalistic practices of construction. Therefore, this thesis provides a brief discussion of interviews with practitioners from the two media, in order to understand how similar or different narratives are manifested and perceived, how the concept of neoliberalism deviates from and is justified in the Chinese context, and how and for what purpose deviations arise from Western to Chinese contexts. The thesis also contributes to defining financial media in the domain of elite communication. The relevant and closely interlocking concepts of globalisation, elitism and neoliberalism are discussed, and are used as a theoretical bedrock in the analysis of texts and contexts. It is important to address the agenda-setting and ideological role of elite financial media, because of its narrative formula of infusing business facts with opinions,which is important in constructing the global elite identity as well as influencing neoliberal policy-making. On the other hand, ‘journalistic professionalism’ has been redefined, in that the elite identity is shared by the content producer, reader and the actors in the news stories emerging from the much-compressed news cycle. The professionalism of elite financial media requires a dual definition, that of being professional in the understanding of business facts and statistics, and that of being professional in the making sense of stories by deploying economic logic.

The Causal Links between FDI and Economic Growth in Developing Countries: A Case Study of the Republic of Rwanda

The study examines the short-run and long-run causality running from real economic growth to real foreign direct investment inflows (RFDI). Other variables such as education (involving combination of primary, secondary and tertiary enrolment as a proxy to education), real development finance, unskilled labour, to real RFDI inflows are included in the study. The time series data covering the period of 1983 -2013 are examined. First, I applied Augmented Dicky-Fuller (ADF) technique to test for unit root in variables. Findings shows all variables integrated of order one [I(1)]. Thereafter, Johansen Co-integration Test (JCT) was conducted to establish the relationship among variables. Both trace and maximum Eigen value at 5% level of significance indicate 3 co-integrated equations. Vector error correction method (VECM) was applied to capture short and long-run causality running from education, economic growth, real development finance, and unskilled labour to real foreign direct investment inflows in the Republic of Rwanda. Findings shows no short-run causality running from education, real development finance, real GDP and unskilled labour to real FDI inflows, however there were existence of long-run causality. This can be interpreted that, in the short-run; education, development finance, finance and economic growth does not influence inflows of foreign direct investment in Rwanda; but it does in long-run. From the policy perspective, the Republic of Rwanda should focus more on long term goal of investing in education to improve human capital, undertake policy reforms that promotes economic growth, in addition to promoting good governance to attract development finance – especially from Nordics countries (particularly Norway and Denmark).

‘Black Settlers’: Hybridity, Neoliberalism and Ecosystemic Change Among Tonga Farmers of Southern Zambia, 1964-2008

This dissertation examines a process of indigenous accumulation among Tonga farmers in Zambia’s Southern Province. In the 1970s multiple authors concluded that capitalist farmers had emerged among Tonga agro-pastoralists, predominantly within private titled holdings. Relying on archival research, newspapers, secondary sources and extensive oral testimony this thesis fills a 35-year gap on the topic, providing insights into the social and environmental impacts of neoliberal policy among African peasants and capitalist farmers. In contrast to dominant narratives of the post-independence period, this study argues that Zambia did experience a developmental process post-independence, which saw significant achievements made in the agricultural sector, including the doubling of national cattle stocks. The data reveals a painful process of disarticulation beginning in the late 1980s. Following neoliberal adjustment, we observe significant heterogeneity in production systems, some regional specialization, and processes of migration. Most importantly, the thesis uncovers processes of overwhelming ecosystemic change that contributed to livestock epidemics of severe scale and scope. Amazingly, this went largely undocumented because of the simultaneous crisis of the state, which left the national statistics office and other state bodies incapable of functioning from the late 1980s into the 2000s. In response, the Zambian state has introduced a number of neodevelopmental initiatives in the sector, yet the lack of animal traction remained up to 2008 and agricultural production declined, while more capitalized farmers (largely white, and/or with foreign direct investment) have become more significant players in the country. This thesis provides compelling evidence to challenge dominant economic thinking of the Washington institutions as well as many of the common Marxian formulations.

Impacts of FDI Renewable Energy Technology Spillover on China's Energy Industry Performance

Environmental friendly renewable energy plays an indispensable role in energy industry development. Foreign direct investment (FDI) in advanced renewable energy technology spillover is promising to improve technological capability and promote China’s energy industry performance growth. In this paper, the impacts of FDI renewable energy technology spillover on China’s energy industry performance are analyzed based on theoretical and empirical studies. Firstly, three hypotheses are proposed to illustrate the relationships between FDI renewable energy technology spillover and three energy industry performances including economic, environmental, and innovative performances. To verify the hypotheses, techniques including factor analysis and data envelopment analysis (DEA) are employed to quantify the FDI renewable energy technology spillover and the energy industry performance of China, respectively. Furthermore, a panel data regression model is proposed to measure the impacts of FDI renewable energy technology spillover on China’s energy industry performance. Finally, energy industries of 30 different provinces in China based on the yearbook data from 2005 to 2011 are comparatively analyzed for evaluating the impacts through the empirical research. The results demonstrate that FDI renewable energy technology spillover has positive impacts on China’s energy industry performance. It can also be found that the technology spillover effects are more obvious in economic and technological developed regions. Finally, four suggestions are provided to enhance energy industry performance and promote renewable energy technology spillover in China.

Energy efficiency in the Chinese provinces: a fixed effects stochastic frontier spatial Durbin error panel analysis

Energy efficiency improvement has been a key objective of China’s long-term energy policy. In this paper, we derive single-factor technical energy efficiency (abbreviated as energy efficiency) in China from multi-factor efficiency estimated by means of a translog production function and a stochastic frontier model on the basis of panel data on 29 Chinese provinces over the period 2003–2011. We find that average energy efficiency has been increasing over the research period and that the provinces with the highest energy efficiency are at the east coast and the ones with the lowest in the west, with an intermediate corridor in between. In the analysis of the determinants of energy efficiency by means of a spatial Durbin error model both factors in the own province and in first-order neighboring provinces are considered. Per capita income in the own province has a positive effect. Furthermore, foreign direct investment and population density in the own province and in neighboring provinces have positive effects, whereas the share of state-owned enterprises in Gross Provincial Product in the own province and in neighboring provinces has negative effects. From the analysis it follows that inflow of foreign direct investment and reform of state-owned enterprises are important policy handles.

Las relaciones económicas y comerciales entre América Latina y Asia-Pacífico: el vínculo con China

Incluye Bibliografía

Economic and trade relations between Latin America and Asia Pacific: The link with China

Includes bibliography