Multinational Restructuring, Internationalization and Small Economies: The Swedish Case (Routledge Studies in International Business and the World Economy, 2)

216 Pages·1995·2.33 MB·English

by  T. Andersson

MULTINATIONAL RESTRUCTURING,
INTERNATIONALIZATION AND
SMALL ECONOMIES
Much of the existing literature of multinational companies has been
concerned with firms originating in the world’s largest economies. This
book redresses this situation by presenting important information on
internationalization of a small country’s industry. Multinational
Restructuring, Internationalization and Small Economies goes beyond
traditional studies of foreign direct investment. By using detailed data
covering practically all Swedish multinationals and more than two
decades of expansion in international markets, the authors describe,
interpret and analyse issues which are normally difficult to investigate.
These include:
● the predominance of take overs as mode of entry;
● the growth of intra-firm trade;
● the internationalization of technology;
● the effects of European integration and the increase in Swedish FDI
and changes in the organization of corporate activity.
The work provides new evidence on the links between foreign
production, on the one hand, and trade, development and diffusion of
technology, employment and regional integration on the other. Home to
many prominent multinationals, Sweden represents a particularly
interesting case study.
This book was mainly written at the Industrial Institute for Economic
and Social Research (IUI), Stockholm. Thomas Andersson, previously
in charge of the International Research Programme at IUI, is currently
Head of the Structural Policy Secretariat, Ministry of Industry and
Commerce, Stockholm. Torbjörn Fredriksson, a former research
fellow at IUI, is Head of Division, Ministry of Industry and Commerce.
Roger Svensson is a research fellow at IUI.
ROUTLEDGE STUDIES IN INTERNATIONAL
BUSINESS AND THE WORLD ECONOMY

1 STATES AND FIRMS Multinational enterprise
Razeen Sally
2 MULTINATIONAL RESTRUCTURING,
INTERNATIONALIZATION AND SMALL ECONOMIES The
Swedish case
Thomas Andersson, Torbjörn Fredriksson and Roger Svensson
3 FOREIGN DIRECT INVESTMENT AND GOVERNMENTS
John Dunning and Rajneesh Narula
4 MULTINATIONAL INVESTMENT AND ECONOMIC
STRUCTURE
Rajneesh Narula
MULTINATIONAL
RESTRUCTURING,
INTERNATIONALIZATI
ON AND SMALL
ECONOMIES
The Swedish Case
Thomas Andersson , Torbjörn
Fredriksson , Roger Svensson
London and New York
First published 1996
by Routledge
11 New Fetter Lane, London EC4P 4EE
This edition published in the Taylor & Francis e-Library, 2005.
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Simultaneously published in the USA and Canada
by Routledge
29 West 35th Street, New York, NY 10001
© 1996 Thomas Andersson, Torbjörn Fredriksson, Roger
Svensson
All rights reserved. No part of this book may be reprinted or
reproduced or utilized in any form or by any electronic,
mechanical, or other means, now known or hereafter
invented, including photocopying and recording, or in any
information storage or retrieval system, without permission
in writing from the publishers.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British
Library
Library of Congress Cataloging in Publication Data
A catalogue record for this book has been requested
ISSN 1359-7930
ISBN 0-203-98238-X Master e-book ISBN
ISBN 0-415-12286-4 (Print Edition)
CONTENTS
List of figures viii
List of tables x
About the authors xiv
Foreword xv
1 INTRODUCTION 1
The wider scope of internationalization 1
Changes in FDI 2
The home country still matters 5
Unique data 7
Content of the book 9
2 MULTINATIONAL COMPANIES AND NATION 13
STATES
Basic theories 13
Organizational forms, ownership and modes of entry 15
Locational determinants of FDI 18
Effects on national economies 21
Reorientation of global FDI 24
3 SWEDEN AND THE INTERNATIONALIZATION 29
PROCESS
From high growth to hardship 29
One-sided internationalization 31
The internationalization of Swedish MNCs 37
vi
Shift in ownership and entry modes 42
4 MULTINATIONAL COMPANIES AND TRADE 49
International trade in transition 49
Foreign production and exports by Swedish MNCs 51
Organizational modes and intra-firm trade 55
Geographical patterns 58
Sectoral patterns 63
Intra-firm trade and mode of establishment 66
Production in affiliates and home country exports 69
5 TECHNOLOGY AND MULTINATIONALS 77
A crucial factor 77
R&D and technical progress 79
Technology creation in Swedish MNCs 82
R&D in foreign affiliates 88
R&D and international competitiveness 96
International technology transfers 98
Expenditures on training 102
6 EUROPEAN INTEGRATION AND RESTRUCTURING 107
BY MULTINATIONALS
Introduction 107
European integration and the Single Market 108
FDI in Europe: EC v. non-EC countries 110
The response of Swedish MNCs 117
Connections between parents and affiliates 122
Home country effects and responses 125
7 SUMMARY AND CONCLUDING REMARKS 131
Appendix A 137
vii
Appendix B 155
Notes 175
References 183
Index 195
FIGURES
1 Inward and outward FDI in Sweden, 1965–93 33
2 Outward direct investment as a. proportion of gross domestic 35
investment by country, 1976–80, 1981–5 and 1986–90
3 Proportion of acquisitions in different regions over time 45
4 Distribution of Swedish MNCs’ output and sales in Sweden 52
and abroad, 1970–90
5 Composition of exports from parent companies of Swedish 53
MNCs, 1970–90
6 Imports from parent companies, total exports and exports to 54
Sweden by manufacturing affiliates of Swedish MNCs in
relation to affiliates’ total sales, 1970–90
7 Destination of sales by Swedish, United States and Japanese 55
majority-owned affiliates abroad, 1990
8 Composition of parent company exports to manufacturing 56
affiliates of Swedish MNCs, identical firms, 1970–90
9 Gross domestic expenditure on R&D as a percentage of GDP 80
in selected OECD countries, 1977 and 1989
10 Average annual growth of R&D expenditure across 84
industries, 1974–90
11 Total, domestic and overseas R&D intensity of Swedish 86
MNCs, 1970–90
12 Overseas production and overseas R&D of Swedish MNCs, 91
1990
13 Distribution of Swedish MNCs’ overseas R&D and overseas 93
production, by region, 1990
14 R&D intensity of Swedish MNCs and the ratio of foreign to 98
total sales, 1990
15 Expenditure on education and training per employee by 103
Swedish MNCs, per industry, at home and abroad, 1990
16 (a) Net flows of FDI in EFTA countries, 1981–92 112
(b) Net flows of FDI in selected EC countries, 1981–92 112
(c) Net flows of FDI in Portugal, Spain, the United Kingdom 113
and the EC as a whole, 1981–92
ix
17 Changes in average inflows and outflows of FDI in EC and 114
EFTA countries between the periods 1981–5 and 1986–90
relative to GNP in 1985 and 1990 respectively
18 Total expenditure on R&D in Sweden relative to GNP, 127
1981–91