Infrastructure or foreign direct investment?: An examination of the implications of MNE strategy for economic development

Yamin, Mo; Sinkovics, Rudolf R.
April 2009
Journal of World Business;Apr2009, Vol. 44 Issue 2, p144
Academic Journal
Abstract: This paper explores the paradoxical relationship between MNE current strategies and economic development. There is evidence that positive developmental impacts of FDI flows are conditional on high levels of human capital and thus on the existence of �good� infrastructure in recipient countries. In this paper we suggest that current MNE strategies have a negative impact on the development of infrastructure in LDCs. The justification for this argument arises from the low developmental impact of current FDI patterns and from rising costs of attracting increasingly footloose investment. The overall effect is to aggravate government financial constraints on the development of basic infrastructure. We develop propositions for future empirical research. We also consider implications for MNE strategy and argue that current MNE strategies are not only ineffective for delivering poverty reduction but that current strategies in developing countries do not necessarily serve the interest of MNEs either.


Related Articles

  • CRITICAL EYE ON BEIJING CRITICAL EYE ON BEIJING. Jun, Lin // China Business Review;Jan/Feb2005, Vol. 32 Issue 1, p50 

    Focuses on the investment environment for international business enterprises in Beijing, China as of 2004. Investments by the local government to improve the infrastructure and facilities in Beijing; Key areas for development highlighted by the municipal government in its industrial plan;...

  • Strategic Traits of Foreign Direct Investment in China: A Country of Origin Perspective. Yadong Luo // Management International Review (MIR);1998 2nd Quarter, Vol. 38 Issue 2, p109 

    This study assesses and compares the strategic traits and their performance implications of foreign direct investment undertaken by international firms from developed countries and emerging markets in China. Developed country investors reveal significantly greater product diversity and market...

  • GAM's Love: Fresh opportunities in frontiers. Love, Tim // Fundweb;12/10/2013, p14 

    The article presents the author's opinion on investment opportunities in frontier markets. During the past three years, frontier markets have outpaced the emerging markets by over 5 per cent per annum, points out the author. According to the author, factors favouring frontier markets include...

  • INFRASTRUCTURE PROJECTS: Fledgling giants.  // Engineer (Online Edition);8/15/2011, p16 

    The article discusses the trends of infrastructure projects in emerging countries. It mentions that some emerging countries like Brazil, Russia, and India lag behind the developed world in the quality of their infrastructure. It notes that the condition creates discomfort to the citizens and...

  • Developed economy investment promotion agencies and emerging market foreign direct investment: The case of Chinese FDI in Canada. Anderson, John; Sutherland, Dylan // Journal of World Business;Oct2015, Vol. 50 Issue 4, p815 

    In light of the perceived benefits derived from inward FDI, many developed economies have systematically established investment promotion agencies (IPAs) to attract foreign investment. While IPAs in the past have been created by a wide variety of countries and regions, their target economies...

  • Social capital and new product development outcomes: The mediating role of sensing capability in Chinese high-tech firms. Zhang, Junfeng; Wu, Wei-ping // Journal of World Business;Oct2013, Vol. 48 Issue 4, p539 

    Abstract: This study investigates the effects of social capital (trust and power) on a high-tech firm's new product development outcomes through the leveraging of its sensing capability in an emerging market, China. A sample of high-tech firms in China is used to test the proposed relationships....

  • The Case for Globalization. Farrell, Diana // International Economy;Jan2004, Vol. 18 Issue 1, p52 

    Reveals the benefits and drawbacks of foreign direct investments (FDI) by multinational companies in developing countries. Disadvantages of tax incentives to attract FDI; Need for governments to focus instead to promote competitive markets; Importance of infrastructure.

  • Managing FDI technology spillovers: A challenge to TNCs in emerging markets Tian, Xiaowen // Journal of World Business;Jul2010, Vol. 45 Issue 3, p276 

    Abstract: Prior studies on foreign direct investment (FDI) technology spillovers have offered little guidance to transnational corporations (TNCs) on how to protect and exploit technology across borders. The present paper argues that TNCs can manage technology spillovers through selection of...

  • Further Reading.  // MarketWatch: Automotive;Aug2007, Vol. 6 Issue 8, p21 

    The article offers news briefs related to the automobile industry and trade. It is stated that the European car aftermarket has become a highly competitive market and mature marketplace. Industry experts say that Russia is one of the fastest growing automotive markets and a favorable place for...


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics