Foreign Direct Investment and Economic Development: An Exploratory Study of The Internalisation Strategy of a Technology-intensive Multinational
Stephanie Cadeddu, Jerome Donovan, Eryadi Masli
Foreign direct investment is considered an important driver of economic development, particularly through its potential transfer of knowledge, know-how and technology to host countries which may enable industrial or economic upgrading. This study explores the internationalisation process of a technological-intensive Multinational Enterprise (MNE) and, through internalisation theory, explores how it transferred its knowledge, know-how and technology to the host country it entered. Through this exploratory study, findings confirm theoretical expectations developed from the extensive literature review, with data showing that the MNE adopted strict governance structures over the activities of its subsidiary, restricting the transfer of its firm specific advantages to the host market, while leveraging from the central coordination and management of product development and value chain activities.