This chapter examines state_industry linkages in the course of the rise of multinational coreporations (MNCs) in emerging markets by drawing on East Asian experiences. Multinationals are both a creature and an instrument of industrial structure change that characterizes the process of economic development. In order for emerging markets to sustain catch up with industrialization they need their own homegrown multinationals so that they can exploit overseas business opportunities at each stage of structural change. In this regard, Japan set important precedents in transplanting low-wage production abroad via outward foreign direct investment (FDI) as a catalyst for industrial upgrading at home (comparative advantage recycling in low-wage production) and combining its resources-seeking FDI with economic cooperation in emerging host economies. The precedent of low-wage production transplantation was first followed by the newly industrializing economies and then has begun to be replicated by China. The precedent of FDI-cum-economic cooperation is currently most actively repeated by China in its efforts to secure overseas minerals and fuels.
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The rise of multinationals from emerging markets: East Asian experiences
The ‘Flying-Geese’ Theory of Multinational Corporations and Structural Transformation
Terutomo Ozawa
Monograph Chapter
In The Evolution of the World Economy
Terutomo Ozawa
- Published in print:
- 25 Mar 2016
Why Akamatsu’s original theory needs reformulation
The ‘Flying-Geese’ Theory of Multinational Corporations and Structural Transformation
Terutomo Ozawa
Kaname Akamatsu set forth the flying-geese theory of economic development as back as the 1930s, drawing on his statistical studies of Japan’s trade in manufactures in 1870_1939. He considered essential the old-fashioned, highly nationalistic, infant-industry protection strategy, a strategy that was designed to propel the three-step sequence of import, domestic production, and export, all by indigenous firms in avoidance of incursions by foreign interests. Arm’s-length trade was the major mode of exchange. Since then, however, the world economy has drastically changed. Multinational corporations (MNCs) are now ubiquitous, setting up production and marketing facilities in each other’s economies. The three-step sequence is carried out instantaneously at the hands of MNCs: local production is initiated simultaneously for export as well as for import substitution. MNCs’ involvement in the three-step sequence is explored.
Monograph Chapter
In The Evolution of the World Economy
Terutomo Ozawa
- Published in print:
- 25 Mar 2016
Research Review
In State Capitalism
Barbara Krug
- Published in print:
- 29 May 2015
Research Review
In State Capitalism
Barbara Krug
- Published in print:
- 29 May 2015
Research Review
In State Capitalism
Barbara Krug
- Published in print:
- 29 May 2015
Barbara Krug
Monograph Chapter
In China’s Economic Miracle
Sumei Tang, Eliyathamby A. Selvanathan and Saroja Selvanathan
- Published in print:
- 30 Jul 2012
Monograph Chapter
In China’s Economic Miracle
Sumei Tang, Eliyathamby A. Selvanathan and Saroja Selvanathan
- Published in print:
- 30 Jul 2012
China’s Economic Miracle
Does FDI Matter?
Sumei Tang, Eliyathamby A. Selvanathan and Saroja Selvanathan
Sumei Tang, Eliyathamby A. Selvanathan and Saroja Selvanathan
Monograph Chapter
In China’s Economic Miracle
Sumei Tang, Eliyathamby A. Selvanathan and Saroja Selvanathan
- Published in print:
- 30 Jul 2012