Swiss inward FDI and its policy context

Switzerland has constantly sought to build an open economy in which foreign actors have been a crucial element of the economic growth process. The quality of the business environment, the central geographic location in Europe and the stability of the political, legal and social system have traditionally attracted a relatively high-level of inward foreign direct investment (IFDI) to the country. However, this success should not be taken for granted. The current economic crisis and the globalization of the world economy are challenging the attractiveness of Switzerland as a FDI location. In a context of fierce competition among countries to attract FDI, Switzerland has constantly to improve the quality of its business environment in order to remain a competitive location for foreign investors

Corporate Social Responsibility for Developing Country Multinational Corporations: Lost War in Pertaining Global Competitiveness?

This article explores the conceptual and practical gap existing between the developed and developing countries in relation to corporate social responsibility (CSR), or the North-South ‘CSR Divide', through the analysis of possible impact on the competitiveness of developing countries' and economies' SMEs and MNEs in globalization. To do so, this article first reviewed the traditional wisdom on the concept of strategic CSR developed in the North and the role that CSR engagement can play in corporate competitiveness, and compare with the impact on the competitive advantage of the South through the supply chains. It points out that among the many factors that could explain the ‘CSR Divide', the negative impact of CSR on comparative advantage is the final resort where developing countries are reluctant and defensive toward western-style CSR. It did point out that developing countries are changing their approaches to make CSR work in favor of their competitive position in global trade, such as China who has started to adopt proactive approach by becoming CSR standards-setter. This article concludes with two policy proposals that aim to bridge the CSR gap, the first is to improve CSR standard-setting participation from both sides, and the second to search for solutions in the international investment legal framework which will define corporate obligations in relating to CSR in a more explicit wa

FDI Effects on National Competitiveness: A Cluster Approach

Despite the close relationship between the activities of multinational enterprises (MNEs) and the competitiveness of host countries, few studies have linked these two subjects from a global perspective. Combining Porter's approach and the work accomplished by international business economists provides a powerful analytical tool with which to review the recent empirical and theoretical literature on the effects of foreign direct investment (FDI) on national competitiveness. The contention is that FDI can indeed be a source of competitiveness but that previous studies have neglected the role of location, in particular the role of clustering on the absorptive capacity of the host State. The aim of this paper is to provide a comprehensive conceptual framework for assessing the effects of FDI on competitiveness to guide policy-makers as well as further researc

The Role and Importance of the Chinese Government for Chinese Outward Foreign Direct Investments

Chinese outward direct investments show a strong positive trend over recent years and have attracted considerable attention from academia and the business press. Many observers and commentators express interest in the role the Chinese government plays in the activities and decision-making of Chinese multinational enterprises (MNEs) in connection with their foreign direct investments (FDI). This article makes a contribution by investigating the relationship between the Chinese government and MNEs in connection with their outward foreign direct investment (OFDI). We present a 2x2 matrix where one dimension includes the interest (high/low) of the Chinese government and the other the interest of MNEs (high/low). We argue that, in market-seeking and strategic asset-seeking, both interests are aligned and high, while for efficency-seeking motives Chinese company interests are high but government interests are relatively low. In regard to resource-seeking motives and balancing foreign currency reserves, Chinese government interests are high but company interests relatively low. Our matrix allows us to understand the role and interests of the Chinese government in the decision-making process as well as the relationships with Chinese companies in outward foreign direct investments

Swiss outward FDI and its policy context

Switzerland's outward foreign direct investment (OFDI) has traditionally been relatively high. The small size of the country, a natural resources shortage and the geographical location at the heart of Europe induced Swiss firms constantly to expand their activities abroad. This exposure to global markets is reflected in its OFDI. Although the global financial and economic crisis pushed the country into a recession and triggered a sharp decrease of OFDI flows, the Swiss OFDI stock continued to grow in 2008 and 2009. Thanks to a well-balanced economic structure based on innovation and knowledge and coherent government policies, Switzerland weathered, at least in the short-term, the effects of the crisis and set the path for a sustainable growth of OFDI

Internationalization Of R&D Activities: The Case Of Swiss MNEs

The roles of foreign research and development (R&D) activities, as well as the consequences of the internationalization of R&D for the domestic firms' specific advantages and the home country's specific advantages, are developed in this paper. Although it is now widely acknowledged that technological activities are becoming more internationally dispersed, theories on the implications of foreign R&D activities on home economies are still scarce. This research brings useful theoretical contributions and evidence to fill this gap. The hypotheses on the motivations for foreign R&D are also tested through an empirical investigation. The data includes 39,281 patents published by Swiss multinational enterprises (MNEs) at the European Patent Office (EPO) from December 1978 to September 2006 and 6,620 patent citations. The patent analysis is complemented by a survey involving 35 major Swiss MNEs. The results show that MNEs perform an increasing share of their R&D activities abroad, concentrated in a few developed countries. Further, MNEs invest and will continue to invest strongly in China and in Asian countries, as well as in developing countries. Supporting local customers and local market is the prevalent type of foreign R&D. Yet, the access to foreign science and technology is becoming increasingly important in all host regions. Knowledge flows within the organization of the firm, suggesting that R&D centres are interconnected. Moreover, domestic firms become more competitive through their access to the host country's specific advantages and spend more resources, especially in the country of origin, the basis of their first competitive advantage

30 Years of foreign direct investment to China: An interdisciplinary literature review

The purpose of this paper is to examine how scholarly research on Foreign Direct Investment (FDI) to the People’s Republic of China has evolved and been shaped using bibliometrics analysis of 422 journal articles published in 151 journals between 1979 and 2008 on that topic. The literature is dominated by the fields of Economics, followed by Business and Management, Planning and Development and International Relations, which together account for 95% of all publications. Ten percent of the most productive journals are responsible for 40% of all publications and 63% of all citations received. By means of citation mapping, four main research streams have been identified: (1) the motives and determinants of FDI to China; (2) ‘inside’ the multinational enterprise (MNE); (3) the impact of MNE activities; and (4) policy implications for the host country. Emerging research streams have been identified as the effects of inward FDI on (i) corporate social responsibility attitudes of domestic and foreign firms, (ii) environmental and climate issues, (iii) the institutional and societal transformation of China, and (iv) the emergence of Chinese MNEs and its impact on the operations of foreign MNEs in China