Transnational Corporations - Volume 18, Issue 2, 2009

This article contributes to an assessment of the scholarly work of Sanjaya Lall, especially as it relates to improved measures of industrial upgrading and technological learning. We argue for the collection of new statistics, in addition to reworking and linking existing data sets. Changes in the global economy, especially the rise of global value chains (GVCs), have created measurement problems that require not only continued innovation in the use of existing data sources, but also the development and deployment of new measures that analyze GVCs more directly. Specifically, we advocate for the collection of establishment-level economic data according to business functions. Data collected according to a standardized set of generic business functions can provide researchers and policymakers with a better map of the value chain, reveal the roles that domestic establishments, firms, and industries play within GVCs, and offer a unique view of the competitive pressures facing domestic firms and industries.

We undertake an examination of the technological catch-up experiences of the leading Japanese industrial firms in the twentieth century, based on both qualitative and quantitative historical evidence. We argue that the international business connections of Japanese firms had a strong influence on the industrial composition of the catch-up of their technological capabilities, and that in turn that catch-up has led to a change in the nature and form of their international business connections. We speculate on some similarities and differences with the current catchup of firms in emerging market economies.

Many of the new member states as well as candidate and accession countries of the EU are confident that membership will result in substantially increased inward foreign direct investment (FDI) in manufacturing. This paper discusses the policy issues and challenges that cohesion and accession countries face, applying lessons that by now have become mainstream in the parallel discussion of FDI-assisted development in the developing economies. We argue that globalization has attenuated the benefits that accrue from EU membership for latecomers, and that they must now compete for FDI not just with other European countries but also with non-EU emerging economies. We posit that they should not base their industrial development strategy on mere passive reliance on FDI flows without considering how to concatenate their industrial development and the nature of the TNC activities they attract.

The volume, The UN and Transnational Corporations: From Code of Conduct to Global Compact, by Tagi Sagafi-Nejad (in collaboration with John H. Dunning), originates in an extraordinarily important endeavour – the creation of an intellectual history of the role of the United Nations in helping to shape global governance in the second half of the twentieth century and the beginning of the current millennium. The work of the United Nations can be divided into two broad categories: promoting economic and social development, and enhancing regional and international security. Within the former sphere, this book presents the record of the United Nations Commission on Transnational Corporations, the United Nations Centre on Transnational Corporations (UNCTC), and the ultimate shift of TNC-related activities within the United Nations system from New York to United Nations Conference on Trade and Development (UNCTAD) in Geneva.

Global FDI flows have been severely affected worldwide by the economic and financial crisis. Inflows are expected to fall from $1.7 trillion in 2008 to below $1.2 trillion in 2009, with a slow recovery in 2010 (to a level up to $1.4 trillion), and then gaining momentum in 2011 (approaching $1.8 trillion).

Outward foreign direct investment (OFDI) from the developing countries, though not a new phenomenon, has grown in volume since the late eighties. And with it, so have the predictable debates on whether or not the phenomenon jells with the received theory of FDI and statistical tests of its impact on the host and home countries. Pradhan’s book departs from the beaten track in many ways. Much of the book is based on information and data painstakingly collected by the author from a variety of sources including the financial press in India. The book includes extensive case studies of firms investing abroad, it charts the birth, growth and overseas investments of India’s software industry in some detail, and the econometric tests are carefully designed with their limitations acknowledged.