Abstract:
This dissertation presents a novel theoretical framework that conceptualises the
existence of tension between multinational enterprises (MNEs) and local firms, in
particular host-country government partners (HGPs), and its mediating mechanisms
with regard to the realisation of spillovers from inward foreign direct investment (FDI) in
emerging and developing economies. The contributions are twofold: firstly it provides a
better understanding of the potential strategies used by local firms to get and maximise
benefits they obtain from spillovers of inward FDI; secondly, it contributes to the extant
literature with novel theoretical constructs that conceptualise the abovementioned
tension and its mediating mechanisms. An in-depth qualitative interview data analysis
is used to support the findings and build up the proposed theoretical constructs.
With regard to the potential causes that underpin the existence of tension in a spillover
context, four main causes were identified, that closely relate to the dyadic contrasting
objectives of MNEs profit maximisation and of local firms benefits maximisation. The
newly proposed framework brings together three theoretical lenses – competitive
tension, relational competition and network bargaining power – under the central theme
of spillover perspective to build an overall powerful model of the interactions between
MNEs, the host-country government and its local partners as well as domestic firms.
The overarching and resulting model highlights the relational interaction, as opposed to
purely transactional or rivalrous behaviour, between MNEs and local firms. It also
shows use of bargaining influence by locals to align realised spillovers to the
expectations of locals, both as spillover enhancing and tension relieving mediating
mechanisms.
