Threat or Opportunity?
Studies in International Investment series
Edited by Karl P. Sauvant
Chapter 9: Who’s Afraid of Emerging-Market TNCs? Or: Are Developing Countries Missing Something in the Globalization Debate?
Andrea Goldstein INTRODUCTION This chapter discusses the consequences of South-to-North FDI ﬂows for OECD governments and ﬁrms. Emerging-market transnational corporations (TNCs) from non-OECD countries wish – and indeed need – to establish a direct presence in OECD countries to develop new resources and capabilities.1 Their rise introduces a wide range of new issues in the policy debate in OECD countries. These include the importance of nationality in determining corporate behavior, the adaptability of non-OECD investors to the policy environment and the informal norms that characterize business in OECD countries, and the consequences for national security. The current wave of globalization is characterized by the unprecedented international scope of distribution systems and markets for goods and services, capital, labor and technology (Feenstra and Hamilton 2006). Yet the rising interdependence of national economies poses challenges to national sovereignty and, somehow paradoxically, opens the door to protectionism, possibly more in the investment than on the trade front. In Europe, in the ﬁrst ﬁve months of 2006, the governments of France, Italy, Poland, and Spain sought to check takeover bids by German (E.On), Italian (ENEL, Unicredit) and Spanish (Abertis) companies, while Korean politicians described foreign investors as ‘vultures’. Still, if recent developments provide any guidance, TNCs from non-OECD countries are particularly exposed to the risk of the ‘selective globalization syndrome’ (Gross 2006), which makes globalization opportunities available à la carte (that is, according to demand) or prix ﬁxe (that is, with constraints) depending on who orders the menu.2 Public opinion is sensitive to an investor’s nationality. In...
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