IDEAS home Printed from https://ideas.repec.org/a/umk/journl/v4y2012i2p25-44.html
   My bibliography  Save this article

Competing for High-quality FDI: Management Challenges for Investment Promotion Agencies

Author

Listed:
  • José Guimón*

    (Department of Economic Structure and Development Economics, Universidad Autónoma de Madrid, Madrid)

  • Sergey Filippov

    (Faculty of Technology, Policy and Management, Delft University of Technology, Delft)

Abstract

Competition for FDI is intensifying and changing in scope as governments of developed and developing countries alike place a higher emphasis on the quality rather than on the quantity of FDI. Against the backdrop of contemporary international business trends, we argue that shifting from quantity to quality in FDI promotion entails a new policy mix and a new approach to performance evaluation. We examine the challenges that investment promotion agencies targeting quality are confronted with from an intellectual capital management perspective, drawing attention to the implications for their human, structural and relational capital. This study offers a broad framework to better guide FDI policy reform and evaluation.

Suggested Citation

  • José Guimón* & Sergey Filippov, 2012. "Competing for High-quality FDI: Management Challenges for Investment Promotion Agencies," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 4(2), pages 25-44, July.
    • Handle: RePEc:umk:journl:v:4:y:2012:i:2:p:25-44
    as

    Download full text from publisher

    File URL: http://ijie.um.edu.my/filebank/published_article/3941/Fulltext2.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Morisset, Jacques, 2003. "Does a country need a promotion agency to attract foreign direct investment : a small analytical model applied to 58 countries," Policy Research Working Paper Series 3028, The World Bank.
    2. Narula, Rajneesh & Guimon, Jose, 2010. "The R&D activity of multinational enterprises in peripheral economies: evidence from the EU new member states," MERIT Working Papers 2010-048, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    3. Torfinn Harding & Beata Smarzynska Javorcik, 2007. "Developing economies and international investors. Do investment promotion agencies bring them together?," Discussion Papers 513, Statistics Norway, Research Department.
    4. Fagerberg, Jan, 1994. "Technology and International Differences in Growth Rates," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1147-1175, September.
    5. Ionara Costa & Sergey Filippov, 2008. "Foreign-owned subsidiaries: A neglected nexus between foreign direct investment, industrial and innovation policies," Science and Public Policy, Oxford University Press, vol. 35(6), pages 379-390, July.
    6. Kemeny, Thomas, 2010. "Does Foreign Direct Investment Drive Technological Upgrading?," World Development, Elsevier, vol. 38(11), pages 1543-1554, November.
    7. Rajneesh Narula & John Dunning, 2010. "Multinational Enterprises, Development and Globalization: Some Clarifications and a Research Agenda," Oxford Development Studies, Taylor & Francis Journals, vol. 38(3), pages 263-287.
    8. Wil Williams & Duncan Lewis, 2008. "Strategic management tools and public sector management," Public Management Review, Taylor & Francis Journals, vol. 10(5), pages 653-671, September.
    9. Anabel Marin & Martin Bell, 2006. "Technology spillovers from Foreign Direct Investment (FDI): the active role of MNC subsidiaries in Argentina in the 1990s," Journal of Development Studies, Taylor & Francis Journals, vol. 42(4), pages 678-697.
    10. Jindra, Björn & Giroud, Axèle & Scott-Kennel, Joanna, 2009. "Subsidiary roles, vertical linkages and economic development: Lessons from transition economies," Journal of World Business, Elsevier, vol. 44(2), pages 167-179, April.
    11. Basinger, Scott J. & Hallerberg, Mark, 2004. "Remodeling the Competition for Capital: How Domestic Politics Erases the Race to the Bottom," American Political Science Review, Cambridge University Press, vol. 98(2), pages 261-276, May.
    12. Sargent, John & Matthews, Linda, 2009. "China versus Mexico in the Global EPZ Industry: Maquiladoras, FDI Quality, and Plant Mortality," World Development, Elsevier, vol. 37(6), pages 1069-1082, June.
    13. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    14. Chaminade, Cristina & Vang, Jan, 2008. "Globalisation of knowledge production and regional innovation policy: Supporting specialized hubs in the Bangalore software industry," Research Policy, Elsevier, vol. 37(10), pages 1684-1696, December.
    15. Costa, Ionara & Filippov, Sergey, 2007. "A New Nexus Between Foreign Direct Investment, Industrial and Innovation Policies," MERIT Working Papers 2007-030, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nicolas Papadopoulos & Yara Ibrahim & Alessandro De Nisco & Maria Rosaria Napolitano, 2018. "The Role of Country Branding in Attracting Foreign Investment: Country Characteristics and Country Image," MERCATI & COMPETITIVIT?, FrancoAngeli Editore, vol. 2018(2), pages 85-108.
    2. K. I. Grasmik & A. A. Nesterov, 2016. "Corporation for development as a tool to attract foreign investment," Studies on Russian Economic Development, Springer, vol. 27(3), pages 262-268, May.
    3. Elena Poliakova & Liesl Riddle & Michael E. Cummings, 2020. "Diaspora investment promotion via public–private partnerships: Case-study insights and IB research implications from the Succeed in Ireland initiative," Journal of International Business Policy, Palgrave Macmillan, vol. 3(1), pages 23-37, March.
    4. Guimón, José & Salazar, Juan Carlos, 2014. "Collaboration in innovation between foreign subsidiaries and local universities: evidence from Spain," Papers in Innovation Studies 2014/5, Lund University, CIRCLE - Centre for Innovation Research.
    5. Marta Götz, 2016. "Policies towards the OFDI and IFDI in the European Union after the 2008+ crisis," Entrepreneurial Business and Economics Review, Centre for Strategic and International Entrepreneurship at the Cracow University of Economics., vol. 4(2), pages 93-103.
    6. Sardor Tadjiev & Pierre-Yves Donze, 2021. "The Development of the Automotive Industry in Post-Soviet Countries since 1991," Eurasian Journal of Business and Management, Eurasian Publications, vol. 9(2), pages 164-183.
    7. Knoerich, Jan & Vitting, Simon, 2021. "The distinct contribution of investment promotion agencies’ branch offices in bringing Chinese multinationals to Europe," Journal of World Business, Elsevier, vol. 56(3).
    8. Filippov, Sergey, 2012. "European investment promotion agencies vis-à-vis multinational companies from emerging economies: Comparative analysis of BRIC investor targeting," MERIT Working Papers 2012-076, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    9. Gustafsson, Robin & Aalto, Eero, 2020. "Inward Foreign Direct Investment Promotion – A Review of Policy Rationales and Impacts," ETLA Reports 103, The Research Institute of the Finnish Economy.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rajneesh Narula & André Pineli, 2017. "Multinational Enterprises and Economic Development in Host Countries: What We Know and What We Don’t Know," Palgrave Studies in Impact Finance, in: Gianluigi Giorgioni (ed.), Development Finance, chapter 6, pages 147-188, Palgrave Macmillan.
    2. Lema, Rasmus & Quadros, Ruy & Schmitz, Hubert, 2012. "Shifts in Innovation Power to Brazil and India: Insights from the Auto and Software Industries," MPRA Paper 49591, University Library of Munich, Germany.
    3. Dachs, Bernhard, 2017. "Internationalisation of R&D: A Review of Drivers, Impacts, and new Lines of Research," MPRA Paper 83367, University Library of Munich, Germany.
    4. Liu, Ting & Li, Xizhuo, 2022. "How Do MNCs Conduct Local Technological Innovation in a Host Country? An Examination From Subsidiaries' Perspective," Journal of International Management, Elsevier, vol. 28(3).
    5. Rajneesh Narula & André Pineli, 2019. "Improving the developmental impact of multinational enterprises: policy and research challenges," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 46(1), pages 1-24, March.
    6. Rajneesh Narula & John Dunning, 2010. "Multinational Enterprises, Development and Globalization: Some Clarifications and a Research Agenda," Oxford Development Studies, Taylor & Francis Journals, vol. 38(3), pages 263-287.
    7. Justine Kyove & Katerina Streltsova & Ufuoma Odibo & Giuseppe T. Cirella, 2021. "Globalization Impact on Multinational Enterprises," World, MDPI, vol. 2(2), pages 1-15, April.
    8. Souzanchi Kashani, Ebrahim & Radosevic, Slavo & Kiamehr, Mehdi & Gholizadeh, Hossein, 2022. "The intellectual evolution of the technological catch-up literature: Bibliometric analysis," Research Policy, Elsevier, vol. 51(7).
    9. Giroud, Axèle & Jindra, Björn & Marek, Philipp, 2012. "Heterogeneous FDI in Transition Economies – A Novel Approach to Assess the Developmental Impact of Backward Linkages," World Development, Elsevier, vol. 40(11), pages 2206-2220.
    10. Cristina Chaminade & Monica Plechero, 2015. "Do Regions Make a Difference? Regional Innovation Systems and Global Innovation Networks in the ICT Industry," European Planning Studies, Taylor & Francis Journals, vol. 23(2), pages 215-237, February.
    11. Emanuela Todeva & Ruslan Rakhmatullin, 2016. "Industry Global Value Chains, Connectivity and Regional Smart Specialisation in Europe. An Overview of Theoretical Approaches and Mapping Methodologies," JRC Research Reports JRC102801, Joint Research Centre.
    12. Alessia Amighini & Claudio Cozza & Elisa Giuliani & Roberta Rabellotti & Vittoria Scalera, 2015. "Multinational enterprises from emerging economies: what theories suggest, what evidence shows. A literature review," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(3), pages 343-370, September.
    13. Jurgita Bruneckiene & Robertas Jucevicius & Ineta Zykiene & Jonas Rapsikevicius & Mantas Lukauskas, 2019. "Assessment of Investment Attractiveness in European Countries by Artificial Neural Networks: What Competences are Needed to Make a Decision on Collective Well-Being?," Sustainability, MDPI, vol. 11(24), pages 1-23, December.
    14. Rajneesh Narula & José Guimón, 2012. "The Role of Multinational Corporations in the National Innovation Systems of the EU New Member States," Chapters, in: Martin Heidenreich (ed.), Innovation and Institutional Embeddedness of Multinational Companies, chapter 13, Edward Elgar Publishing.
    15. Costa, Ionara & Marin, Anabel, 2007. "Foreign-owned firms and technological capabilities in the Argentinean manufacturing industry," MERIT Working Papers 2007-036, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    16. Fagerberg, Jan & Srholec, Martin & Verspagen, Bart, 2010. "Innovation and Economic Development," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 833-872, Elsevier.
    17. Lema, Rasmus & Quadros, Ruy & Schmitz, Hubert, 2015. "Reorganising global value chains and building innovation capabilities in Brazil and India," Research Policy, Elsevier, vol. 44(7), pages 1376-1386.
    18. Miroslav Šipikal & Milan Buček, 2018. "The Role of FDI in Regional Innovation and Its Influence on the Emergence of Knowledge Spillover Effects," Advances in Spatial Science, in: Jan Stejskal & Petr Hajek & Oto Hudec (ed.), Knowledge Spillovers in Regional Innovation Systems, pages 195-218, Springer.
    19. Carol Newman & John Page & John Rand & Abebe Shimeles & Måns Söderbom & Finn Tarp, 2018. "Linked in by foreign direct investment: The role of firm-level relationships in knowledge transfers in Africa and Asia," WIDER Working Paper Series wp-2018-161, World Institute for Development Economic Research (UNU-WIDER).
    20. Marin, Anabel & Sasidharan, Subash, 2008. "The Heterogeneity of MNC' Subsidiaries and Technology Spillovers: Explaining positive and negative effects in emerging economies," MERIT Working Papers 2008-066, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

    More about this item

    Keywords

    FDI; intellectual capital; investment promotion; multinational companies;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:umk:journl:v:4:y:2012:i:2:p:25-44. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Teoh Wern Jun (email available below). General contact details of provider: https://edirc.repec.org/data/feaummy.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.