Abstract
Previous studies have reported that technology spillovers from subsidiaries of MNE (multinational enterprises) can vary due to such factors as a performance gap, the level of technology intensity and local absorptive capacity. However those studies do not consider the changes in a firm’s task environments. This research therefore focuses on spillovers from foreign direct investment (FDI) in the context where there are rapid and discontinuous changes in technology and market competition, or namely, in high-velocity environments. When environment velocity is high, firms adjust their strategies and those decisions affect the way conventional channels of FDI spillovers work. Our key findings about FDI spillovers in high environment velocity are threefold: 1) local firms are likely to experience significant positive horizontal FDI spillovers, if they compete with MNE subsidiaries; 2) there are insignificant backward FDI spillovers, if local firms are suppliers of MNE subsidiaries; and 3) there are significant positive forward FDI spillovers on local customers, if those local firms buy inputs from MNE subsidiaries. The contribution of this research lies in exploring environment velocity as a moderator in the FDI spillover mechanism and in proposing valid methodology for empirical evidence. Finally, our findings provide an explanation about the non-linear relationship between FDI and economic development.
| Original language | English |
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| Title of host publication | Academy of Management Best Paper Proceedings |
| Place of Publication | New York |
| Publisher | Academy of Management (AoM) |
| Number of pages | 6 |
| Edition | 2012 |
| DOIs | |
| Publication status | Published - 2012 |
| Event | Academy of Management Annual Meeting 2012 - Boston, MA, United States Duration: 3 Aug 2012 → 7 Aug 2012 |
Conference
| Conference | Academy of Management Annual Meeting 2012 |
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| Country/Territory | United States |
| City | Boston, MA |
| Period | 3/08/12 → 7/08/12 |