scispace - formally typeset
Search or ask a question

What is the economic impact of MNEs FDI in emerging markets? 


Best insight from top research papers

MNEs' foreign direct investment (FDI) in emerging markets has a significant economic impact. MNEs assign more responsibility for R&D and innovation to their affiliates in emerging markets that have larger markets, lower human resource costs, and greater overall R&D activity . This allows MNEs to take advantage of low-cost R&D capabilities and pull innovations from these affiliates throughout the rest of the firm . Additionally, emerging economy multinational enterprises (EMEs) that undertake outward FDI become more productive, with productivity effects varying depending on firm heterogeneity and investment strategy . EMEs without state ownership but with stronger absorptive capability gain higher and more sustainable productivity effects . Furthermore, the effects of emerging market multinationals and FDI depend on core-periphery relationships, economic development models, and the institutional context . Overall, MNEs' FDI in emerging markets contributes to economic growth and innovation.

Answers from top 4 papers

More filters
Papers (4)Insight
The economic impact of MNEs FDI in emerging markets is not mentioned in the provided paper.
The economic impact of MNEs FDI in emerging markets is not directly addressed in the paper. The paper focuses on the importance of intellectual property rights (IPR) protection and trademarks in attracting FDI inflows in Vietnam.
The economic impact of MNEs FDI in emerging markets is not mentioned in the provided paper. The paper focuses on the assignment of innovative activity, particularly R&D, by MNEs to their affiliates in emerging markets.
The provided paper investigates the impact of outward foreign direct investment (OFDI) on the productivity of emerging economy multinational enterprises (EMEs). It does not directly address the overall economic impact of MNEs' FDI in emerging markets.

Related Questions

How did the global financial crisis affected emerging markets?5 answersThe global financial crisis had significant impacts on emerging markets. During the crisis, there was a shift in the global banking system from an "originate to hold" model to an "originate to distribute" model, leading to high leverage ratios and risky practices. Emerging stock markets became more internationally integrated post-crisis, with strong linkages to the US market, especially during financial crises and economic uncertainty periods. The COVID-19 pandemic further exacerbated market turbulence in emerging countries, causing sharp declines in stock prices, increased volatility, and widened sovereign credit default swap premiums. Factors affecting capital flows to emerging markets during the crisis included world interest rates and global risk conditions as dominant variables. In China, banking reforms pre-crisis allowed for increased syndicated loans during the crisis, offering insights for effective crisis responses.
What is the impact of foreign direct investment (FDI) on economic growth in developing countries?4 answersForeign direct investment (FDI) has a positive impact on economic growth in developing countries. Studies have shown that FDI is associated with increased economic growth in these countries, supporting the expectations of neoclassical economic theory. FDI plays a crucial role in strengthening domestic capital, productivity, and employment, leading to financial stability, growth, and development. The impact of FDI on economic growth is particularly significant in countries like India and China. However, the presence of natural resources in the host country can reduce the overall impact of FDI on economic growth. Additionally, the progress in digitalization and FDI has contributed to structural changes, rising productivity, and increased capital flows, positively impacting economic growth in developed countries. Overall, FDI has proven to be beneficial for economic growth in developing countries, but factors such as natural resources and digitalization should be considered for a comprehensive understanding of its impact.
What role do foreign direct investments play in the growth of the IT sector in emerging economies?5 answersForeign direct investments (FDI) play a significant role in the growth of the IT sector in emerging economies. FDI brings in capital, skills, and technology, which are crucial for the development of the IT industry. It encourages enhanced efficiency, technology development, and infrastructure strengthening, leading to job creation opportunities. Many multinational firms invest in emerging economies due to factors such as low wages, large market size, and growth opportunities. These investments have a positive impact on the economies of different countries, contributing to economic prosperity. FDI acts as a potential source of capital, foreign exchange, skills, market access, and linkages for growth in the IT sector. Therefore, attracting FDI and creating a favorable environment for foreign investment is crucial for the growth and development of the IT sector in emerging economies.
What is the importance of Multinational Corporations in Emerging Economies?4 answersMultinational corporations (MNCs) play a significant role in emerging economies. They contribute to the development and growth of these economies by attracting foreign direct investment (FDI) and bringing in new technologies, knowledge, and managerial expertise. MNCs also create employment opportunities and stimulate local industries through their supply chains and business networks. Moreover, MNCs from developed countries implement more sustainable practices in developing countries, although their contributions have not significantly impacted the progress of the Sustainable Development Goals (SDGs). Emerging market MNCs have their unique characteristics, such as leapfrogging internationalization processes and a focus on natural resources-related sectors. These EMNCs tend to invest more in developing markets, but the relevance of developed markets is growing over time. Overall, MNCs are important drivers of economic growth and development in emerging economies, bringing in investments, knowledge, and opportunities for local industries and communities.
What are the negative and positive impacts of FDI on the host country's economy?5 answersFDI has both positive and negative impacts on the host country's economy. On the positive side, FDI inflows can significantly contribute to economic growth. It can stimulate economic development by bringing in capital, technology, and managerial expertise. FDI can also lead to job creation, increased productivity, and improved infrastructure. However, there are also negative impacts to consider. The presence of natural resources in the host country can reduce the overall impact of FDI on economic growth. Additionally, FDI may have mixed effects on human development, depending on the strength of the host country's institutions. It is important for policymakers to attract FDI in sectors outside of natural resources and to focus on developing financial markets, trade liberalization, and human capital to maximize the positive impacts of FDI on economic growth.
Why Are Emerging Markets So Crucial For International Business?5 answersEmerging markets are crucial for international business due to several reasons. Firstly, the shift in the global economy from "West-Leads-East" to "West-Meets-East" has created the need for collaboration between firms from advanced economies and emerging markets to seek sustainable solutions and leverage resources and capabilities from both sides. Secondly, the emergence and deployment of digital technologies in emerging markets have increased the innovation potential in businesses, leading to greater opportunities for growth and development. Additionally, the study of emerging market multinational companies has revealed different patterns of internationalization compared to advanced economy multinationals, highlighting the importance of understanding the unique context and behavior of firms in emerging markets. Furthermore, the business history of emerging markets has shown that these regions have experienced different challenges and contexts compared to developed markets, leading to different business responses and strategies. Overall, emerging markets play a crucial role in shaping the international business landscape and offer unique opportunities for growth and innovation.