Scandinavian Working Papers in Economics

Papers in Innovation Studies,
Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy

No 2013/47: Commonalities and differences between production-related FDI (PFDI) and technology-related FDI (TFDI) in developed and emerging economies

Keyvan Alvandi (), Cristina Chaminade () and Ping Lv ()
Additional contact information
Keyvan Alvandi: CIRCLE, Lund University, Postal: CIRCLE, Lund University, PO Box 117, SE-22100 Lund, Sweden
Cristina Chaminade: CIRCLE, Lund University, Postal: CIRCLE, Lund University, PO Box 117, SE-22100 Lund, Sweden
Ping Lv: University of Chinese Academy of Sciences, China, Postal: CIRCLE, Lund University, PO Box 117, SE-22100 Lund, Sweden

Abstract: This paper investigates commonalities and differences in firm level determinants of internationalization of production (production related investments or PFDI) and innovation (technology driven investments or TFDI) by Multinational Enterprises (MNEs). Our database is based on a cross country survey which includes firms within Automotive, Agro-processing and ICT sectors from both developing and advanced economies. Our results show that despite some differences, most of the determinants affect in a similar manner both the PFDI and TFDI which rather contradicts recent arguments claiming significant differences between the two. More interestingly however, we found that institutional determinants such as policies related to foreign direct investments play almost no role in internationalization process of firms while managerial (internal to the firm) determinants had a far greater impact.

Keywords: Foreign direct investment; Multinationals; Globalization; offshoring; TFDI

JEL-codes: F60; F68

28 pages, December 20, 2013

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201347_Alvandi_et_al.pdf PDF-file 

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