IDEAS home Printed from https://ideas.repec.org/p/por/fepwps/160.html
   My bibliography  Save this paper

Sourcing Patterns of Foreign-owned Multinational Subsidiaries in Europe

Author

Listed:
  • Ana Teresa Tavares

    (CEMPRE, Faculdade de Economia, Universidade do Porto)

  • Stephen Young

    (Strathclyde International Business Unit, University of Strathclyde)

Abstract

This paper investigates the determinants of the international input sourcing propensities of foreign-owned multinational subsidiaries in four EU host countries. Major findings concern the impact of subsidiary roles and economic integration on international sourcing patterns. Regional and global integration are leading to a greater import-orientation among MNE subsidiaries, including Product Mandate firms which are assumed to be strongly embedded within host economies. The results cast serious doubts on the effectiveness of traditional criteria for investment attraction; and confirm that stimulating local sourcing is problematic. Specific policy implications are developed relating to the attraction of inward foreign direct investment and to corporate development policies.

Suggested Citation

  • Ana Teresa Tavares & Stephen Young, 2004. "Sourcing Patterns of Foreign-owned Multinational Subsidiaries in Europe," FEP Working Papers 160, Universidade do Porto, Faculdade de Economia do Porto.
    • Handle: RePEc:por:fepwps:160
    as

    Download full text from publisher

    File URL: http://www.fep.up.pt/investigacao/workingpapers/04.10.19_WP160_ana.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. McAleese, Dermot & McDonald, Donogh, 1978. "Employment Growth and the Development of Linkages in Foreign-Owned and Domestic Manufacturing Enterprises," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 40(4), pages 321-339, November.
    2. Barry, Frank & Bradley, John, 1997. "FDI and Trade: The Irish Host-Country Experience," Economic Journal, Royal Economic Society, vol. 107(445), pages 1798-1811, November.
    3. Mike Crone & Stephen Roper, 2001. "Local Learning from Multinational Plants: Knowledge Transfers in the Supply Chain," Regional Studies, Taylor & Francis Journals, vol. 35(6), pages 535-548.
    4. McFadden, Daniel L., 1984. "Econometric analysis of qualitative response models," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 24, pages 1395-1457, Elsevier.
    5. Magnus Blomström & Ari Kokko & Mario Zejan, 2000. "Multinational Corporations and Spillovers," Palgrave Macmillan Books, in: Foreign Direct Investment, chapter 8, pages 101-133, Palgrave Macmillan.
    6. Holger Gorg & Frances Ruane, 2001. "Multinational Companies and Linkages: Panel-Data Evidence for the Irish Electronics Sector," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 8(1), pages 1-18.
    7. Masaaki Kotabe & Glenn S Omura, 1989. "Sourcing Strategies of European and Japanese Multinationals: A Comparison," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 20(1), pages 113-130, March.
    8. Markusen, James R. & Venables, Anthony J., 1999. "Foreign direct investment as a catalyst for industrial development," European Economic Review, Elsevier, vol. 43(2), pages 335-356, February.
    9. Mona V Makhija & Kwangsoo Kim & Sandra D Williamson, 1997. "Measuring Globalization of Industries Using a National Industry Approach: Empirical Evidence Across Five Countries and over Time," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 28(4), pages 679-710, December.
    10. Anil K. Gupta & Vijay Govindarajan, 2000. "Knowledge flows within multinational corporations," Strategic Management Journal, Wiley Blackwell, vol. 21(4), pages 473-496, April.
    11. Robert Pearce & Marina Papanastassiou, 1997. "European Markets and the Strategic Roles of Multinational Enterprise Subsidiaries in the UK," Journal of Common Market Studies, Wiley Blackwell, vol. 35(2), pages 243-266, June.
    12. John Cantwell & Simona Iammarino, 2000. "Multinational Corporations and the Location of Technological Innovation in the UK Regions," Regional Studies, Taylor & Francis Journals, vol. 34(4), pages 317-332.
    13. Sharon Watson O’Donnell, 2000. "Managing foreign subsidiaries: agents of headquarters, or an interdependent network?," Strategic Management Journal, Wiley Blackwell, vol. 21(5), pages 525-548, May.
    14. 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.
    15. Magnus Blomström & Ari Kokko & Mario Zejan, 2000. "Foreign Direct Investment," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-59861-4, March.
    16. Paterson, S. L. & Brock, D. M., 2002. "The development of subsidiary-management research: review and theoretical analysis," International Business Review, Elsevier, vol. 11(2), pages 139-163, April.
    17. Paul M Swamidass, 1993. "Import Sourcing Dynamics: An Integrative Perspective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 24(4), pages 671-691, December.
    18. David L Levy, 1995. "International Sourcing and Supply Chain Stability," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 26(2), pages 343-360, June.
    19. James H Taggart, 1997. "Autonomy and Procedural Justice: A Framework for Evaluating Subsidiary Strategy," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 28(1), pages 51-76, March.
    20. Harzing, Anne-Wil, 1997. "Response rates in international mail surveys: Results of a 22-country study," International Business Review, Elsevier, vol. 6(6), pages 641-665, December.
    21. repec:bla:jecsur:v:12:y:1998:i:3:p:247-77 is not listed on IDEAS
    22. Rugman, Alan M. & Brewer, Thomas L. (ed.), 2001. "The Oxford Handbook of International Business," OUP Catalogue, Oxford University Press, number 9780199241828.
    Full references (including those not matched with items on IDEAS)

    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. Ana Teresa Tavares & Stephen Young, 2004. "Sourcing Patterns of Foreign-owned Multinational Subsidiaries in Europe," ERSA conference papers ersa04p575, European Regional Science Association.
    2. Ana Teresa Tavares & Stephen Young, 2006. "Sourcing patterns of foreign-owned multinational subsidiaries in Europe," Regional Studies, Taylor & Francis Journals, vol. 40(6), pages 583-600.
    3. Dimitratos, Pavlos & Liouka, Ioanna & Young, Stephen, 2009. "Regional location of multinational corporation subsidiaries and economic development contribution: Evidence from the UK," Journal of World Business, Elsevier, vol. 44(2), pages 180-191, April.
    4. Giroud, Axèle, 2007. "MNEs vertical linkages: The experience of Vietnam after Malaysia," International Business Review, Elsevier, vol. 16(2), pages 159-176, April.
    5. Laura Alfaro & Andrés Rodriguez-Clare, 2004. "Multinationals and Linkages: An Empirical Investigation," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Spring 20), pages 113-169, January.
    6. Holger Görg & Eric Strobl, 2016. "Multinational companies and indigenous development: An empirical analysis," World Scientific Book Chapters, in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT, chapter 17, pages 305-322, World Scientific Publishing Co. Pte. Ltd..
    7. Young, Stephen & Tavares, Ana Teresa, 2004. "Centralization and autonomy: back to the future," International Business Review, Elsevier, vol. 13(2), pages 215-237, April.
    8. Teixeira, Aurora A.C. & Tavares-Lehmann, Ana Teresa, 2014. "Human capital intensity in technology-based firms located in Portugal: Does foreign ownership matter?," Research Policy, Elsevier, vol. 43(4), pages 737-748.
    9. Hynes, Kate & Kwan, Yum K. & Foley, Anthony, 2020. "Local linkages: The interdependence of foreign and domestic firms in Ireland," Economic Modelling, Elsevier, vol. 85(C), pages 139-153.
    10. Hansen, Michael W. & Pedersen, Torben & Petersen, Bent, 2009. "MNC strategies and linkage effects in developing countries," Journal of World Business, Elsevier, vol. 44(2), pages 121-130, April.
    11. Simona Iammarino, 2018. "FDI and regional development policy," Journal of International Business Policy, Palgrave Macmillan, vol. 1(3), pages 157-183, December.
    12. Joanna Scott-Kennel, 2007. "Foreign direct investment and local linkages: An empirical investigation," Management International Review, Springer, vol. 47(1), pages 51-77, February.
    13. Santos, Eleonora, 2017. "Externalities from FDI on domestic firms’ Productivity: A Literature Review for Developed Countries," MPRA Paper 88958, University Library of Munich, Germany.
    14. Urmas Varblane & Katrin Männik & Helena Hannula, 2005. "Autonomy And Performance Of Foreign Subsidiaries In Transition Countries," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 38, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    15. Williams, Christopher & van Triest, Sander, 2009. "The impact of corporate and national cultures on decentralization in multinational corporations," International Business Review, Elsevier, vol. 18(2), pages 156-167, April.
    16. Nuno Crespo & Maria Paula Fontoura & Isabel Proença, 2009. "FDI spillovers at regional level: Evidence from Portugal," Papers in Regional Science, Wiley Blackwell, vol. 88(3), pages 591-607, August.
    17. Beata Smarzynska Javorcik, 2004. "Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages," American Economic Review, American Economic Association, vol. 94(3), pages 605-627, June.
    18. Crespo, Cátia Fernandes & Lages, Luis Filipe & Crespo, Nuno Fernandes, 2020. "Improving subsidiaries' innovation through knowledge inflows from headquarters and peer subsidiaries," Journal of International Management, Elsevier, vol. 26(4).
    19. BARRIOS, Salvador & BERTINELLI, Luisito & STROBL, Eric, 2002. "Coagglomeration and growth," LIDAM Discussion Papers CORE 2002053, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    20. Gleich, Wolfgang & Schmeisser, Bjoern & Zschoche, Miriam, 2017. "The influence of competition on international sourcing strategies in the service sector," International Business Review, Elsevier, vol. 26(2), pages 279-287.

    More about this item

    Keywords

    Multinational enterprises; Subsidiaries; Sourcing; Europe.;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F15 - International Economics - - Trade - - - Economic Integration

    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:por:fepwps:160. 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: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/fepuppt.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.