Power Relationships along the Value Chain: Multinational Firms, Global Buyers, and Local Suppliers' Performance

There is an growing literature exploring the increasing fragmentation of production processes and the evolution of internationally-dispersed but functionally-integrated economic activities. However, most of this literature appears to neglect an important part of the story, that is the form and the organization of the relationships (the governance) among the various actors involved in these activities, and their implications for development. We develop this analysis in this paper, and explore it empirically with a new dataset on Thailand. In order to address this issue, we study global and domestic value chains in Thailand, and develop a quantitative measure of their governance, which takes into account different levels and types of buyers' involvement with suppliers' activities. We then use this measure to explore econometrically its relationship with suppliers' performance. An important finding is that the relationships MNCs have with their suppliers is multifold and generally more intense than for domestic value chains. Our estimates suggest that more intense buyers' involvement with local suppliers, not only in the definition of products' characteristics, design and quality, but also in technology dissemination and R&D is generally associated with higher suppliers' productivity. However, the governance of the value chain appears to affect the productivity of domestic value chains' suppliers to a greater extent than for firms supplying MNCs or for exporters. We suggest that this result may be explained by the different nature of the information and knowledge being exchanged, and by the gaps between the leader and its suppliers.North-South, Keywords: Global Value Chains, Multinational Corporations, Foreign Direct Investment, Upgrading, Productivity

Trade Openness and Vulnerability in Central and Eastern Europe

international trade, vulnerability, volatility, Central and Eastern European countries

WHY DO RESEARCHERS COLLABORATE WITH INDUSTRY? AN ANALYSIS OF THE WINE SECTOR IN CHILE, SOUTH AFRICA AND ITALY

This paper explores the determinants of the linkages between industry and research organizations – including universities. We present new evidence on three wine producing areas – Piedmont, a region of Italy, Chile, South Africa - that have successfully reacted to the recent structural changes experienced in the industry worldwide. Based on an original data-set, we carry out an econometric exercise to study the microeconomic determinants of researchers' collaborations with industry. The evidence reveals that individual researcher characteristics, such as embeddedness in the academic system, age and sex, matter more than their publishing record or formal degrees.University-Industry Linkages, Innovation System, Wine Sector, Emerging Economies

Location Strategies of Multinationals from Emerging Countries in the EU Regions. LEQS Discussion Paper No. 93/2015 May 2015

This paper contributes to the current debate in both Economic Geography and International Business on the nature and strategies of Multinational Enterprises (MNEs) from emerging countries (EMNEs). The paper fills a relevant gap in the existing literature by shedding new light on the location strategies of EMNEs at the national and regional level, looking at their investment drivers and systematically comparing them with those of multinationals from advanced countries (AMNEs). The empirical analysis looks at the location choices of MNEs in the European Union (EU-25) regions and unveils that EMNEs follow distinctive location strategies. Their attraction into large regional markets is similar to AMNEs as well as their irresponsiveness to efficiency seeking motives. Conversely, the most knowledge-intensive investments of EMNEs respond mainly to two ‘attraction’ factors: strategic assets (in the form of local technological dynamism) and the agglomeration of foreign investments in the same business functions. In addition, both the national and the regional levels are simultaneously relevant to EMNEs decisions. The empirical analysis is based on 22,065 projects undertaken by MNEs from three selected groups of countries (intra-EU, North America, Emerging Countries) into the EU2

Regional strategic assets and the location strategies of emerging countries’ multinationals in Europe

This paper explores the location strategies of Multinational Enterprises (MNEs) from emerging countries (EMNEs) in search for regional strategic assets. The analysis is based on a systematic comparison between EMNEs and multinationals from advanced countries (AMNEs) in order to unveil similarities and differences between these two major sources of foreign investments into the regions of the European Union. The empirical results suggest that EMNEs follow a distinct logic in their location strategies because they are attracted by the availability of technological competences only when their subsidiaries pursue more sophisticated and technology-intensive activities. Conversely EMNEs share some behavioural similarities with AMNEs in their response to the spatial agglomeration of investments

Networks, cluster development programs, and performance: the electronics cluster in Córdoba, Argentina

This chapter is based on the results of a study on the evaluation of Cluster Development Programs (CDP) in the electronics cluster of Córdoba, Argentina. It assesses the relationship existing between the CDP and the formation and consolidation of local inter-organizational networks, which constitute one of the CDP key targets. The CDP took place in-between 2003 and 2007 and it was part of a wider set of CDPs, called Programas de Integración Productiva (PIP), co-funded by the Multilateral Investment Fund (FOMIN), the Inter-American Development Bank (IADB) and by local resources. The objectives of this study are threefold: first, it aims at analyzing the evolution of inter-organizational networks in the electronics cluster of Córdoba; second, it explores any beneficial effect of the CDP, with particular reference to the changes occurred in the inter-organizational networks, not only between local firms, but also between them and other external institutional actors (universities, government institutions etc). Third, it aims to investigate whether the changes occurred in the inter-organizational networks have generated beneficial effects on the performance of firms. In particular, the study will seek an answer to these questions. Finally, this study also aims at drawing recommendations for policy design and at suggesting best practices that can be useful for other future policy designs.https://publications.iadb.org/en/impact-evaluation-cluster-development-programs-methods-and-practicesFil: Giuliani, Elisa. University of Pisa. Department of Economics and Management; Italy.Fil: Matta, Andres. Universidad Nacional de Córdoba. Facultad de Ciencias Económicas; Argentina.Fil: Pietrobelli, Carlo. Banco Interamericano de Desarrollo; Estados Unidos.Otras Sociologí

Local-foreign technology interface, resource-based development, and industrial policy: how Chile and Malaysia are escaping the middle-income trap

This paper starts by showing that Chile and Malaysia are on the path of escaping the middle-income trap in terms of their income level relative to that of the USA. In contrast to the conventional view, we find that the leading export sectors are not manufacturing (such as electronics) in Malaysia or mining alone in Chile. Instead, the engines of growth have been (1) resource-based sectors (petroleum, rubber and palm oil) in Malaysia; and (2) non-mining resource-based sectors (salmon, fruits, wine and wood-based) in Chile. Furthermore, the sustained growth of these sectors is not the result of free-markets, as frequently argued, but also of specific industrial policy measures, that have enabled the accumulation of productive and innovation capabilities through R&D support, fiscal incentives, export assistance, and quality control. We also find that the emergence of locally-controlled firms has been an important aspect of this long-term success, although the sources of the initial learning included foreign actors and FDI. The cases of Chile and Malaysia consequently show the possibility of escaping the middle-income trap not through manufacturing but instead through resource-based development. Such strategy differs from the so-called short cycle technology-based catch-up by the East Asian tigers and from the unsustainable commodity rent-extraction in resource-rich countries, but is consistent with the view that emphasizes the need to specialize in sectors with low entry barriers, and to promote investments in innovation and technological capabilities

Business Development Service centres in Italy: close to firms, far from innovation

Abstract: The notion of ‘Business Development Service ’ (BDS) is quickly gaining popularity among policy makers and scholars of management, industrial organisation and development. Similarly, attention is increasingly paid to the institutions and centres offering BDS, as an essential part of the ‘local ’ or ‘regional innovation system’. The paper analyses the experience of BDS Centres in three highly developed Italian regions, Emilia Romagna, Lombardia and Veneto, and evaluates their performance and contribution to the regional industrial, and notably SME, development. The paper is based on a survey of 30 BDS Centres and it uses quantitative together with qualitative evidence