Title: Knowledge spillovers through inward FDI in emerging markets: an empirical examination in the supermarket industry

Authors: Byung Il Park; Chong-Hoe Kim; Suk Bong Choi

Addresses: College of Business Administration, Hankuk University of Foreign Studies, 270, Imun-dong, Dongdaemun-gu, Seoul 130-791, South Korea ' College of Business Administration, Hankuk University of Foreign Studies, 270, Imun-dong, Dongdaemun-gu, Seoul 130-791, South Korea ' College of Business & Economics, Korea University, 2511 Sejong-ro, Sejong City 339-700, South Korea

Abstract: This study sets out to determine the mechanisms of intra-industry knowledge spillovers from inward FDI in the service sector of an emerging economy. Upon the basis of survey data from a local supermarket in South Korea, the study indicates that a demonstration effect is an efficient channel of knowledge flows from MNE subsidiaries to local firms. Worker mobility and local firms' absorptive capacity also play important roles in learning foreign knowledge in the perspective of local organisations, although the impact is somewhat marginal. Competitive pressure, however, does not exhibit any significant association with knowledge spillovers. This paper contributes to a concept, competitive dynamics, by shedding light on mechanisms of horizontal knowledge spillovers among actors within a strategic group. Some practical implications for managers of MNEs and local firms are also suggested.

Keywords: knowledge spillovers; competitive dynamics; supermarket industry; emerging economies; foreign direct investment; inward FDI; supermarkets; South Korea; knowledge flows; MNE subsidiaries; MNEs; multinational enterprises; worker mobility; local firms; absorptive capacity; competitive pressure.

DOI: 10.1504/EJIM.2016.076266

European Journal of International Management, 2016 Vol.10 No.3, pp.314 - 342

Available online: 24 Apr 2016 *

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