Title: Multinational enterprises and their linkage effects on local socio-economic environments in emerging markets

Authors: Laura Salciuviene, Agnieszka Chidlow, Pervez N. Ghauri, Thao Bach Nguyen

Addresses: Lancaster University Management School, Lancaster, LA1 4YX, UK. ' Staffordshire University, Brindley Building, Leek Road, Stoke on Trent, Staffordshire ST4 2DF, UK. ' Kings College, London, Franklin-Wilkins Building, 150 Stamford Street, London SE1 9NH, UK. ' London, UK

Abstract: This study investigates how Multinational Enterprise (MNE) factors and host country factors have an impact on backward relationship linkage formation and how the linkages between the foreign subsidiary and local firms generate benefits to the local socio-economic environment. A model is developed from the literature and refined using case studies based on in-depth interviews with top managers of service companies| foreign subsidiaries operating in Poland. The findings suggest that four factors affect the formation of relationship linkages: the MNE|s mode of entry, the subsidiary|s autonomy, government policy (consisting of the development of infrastructure and skills needed by MNEs and protection of data and intellectual property rights), and government incentives (including incentives for both long-term projects and the search for and identification of newer technology). Benefits to the local socio-economic environment deriving from linkages include local jobs, absorption of knowledge and uplifting of the firms| self-image. The study concludes with implications for policy makers.

Keywords: multinational enterprises; MNEs; linkages; benefits; local environment; socio-economic environment; emerging economies; services; emerging markets; business relationships; foreign subsidiaries; Poland; government policy; government incentives; entry mode; market entry; autonomy.

DOI: 10.1504/IJBE.2009.028797

International Journal of Business Environment, 2009 Vol.2 No.4, pp.468 - 484

Available online: 30 Sep 2009 *

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