The multinational companies - an institutional response to the changes in the technological market

Corduneanu, Carmen and Iovu, Laura Raisa (2008): The multinational companies - an institutional response to the changes in the technological market. Published in: International Journal of Strategic Management and Decision Support Systems in Strategic Management , Vol. 1, No. 1 (15 May 2008)

Abstract

The globalization process, from both a temporal and locational point of view, has led to changes in the human interrelations, to the unification and expansion of economical activities over the regions and countries. The Romanian economy is depending strongly on the decisions made by large multinational companies that influence upon its integration in the international productive system. Setting up subsidiaries of these multinational companies in Romania is determined by cheap working factors, adaption of the production to the local market demand, penetration of the Romanian market and of the regional markets, an increase in the global effiency at the level of such multinational company. The cross-border inflows of foreign direct investments contribute to the technological transfer, to an increase of the productivity, a better allocation of capital, a significant increase in the exports and of the quality of the life. The foreign direct investments realized in Romania have led to a visible bettering of the country rating and of the economical performances. The technological transfers performed by multinational companies generate positive spillovers through the reduction of the productivity disparities, the accorded technical assistance, the continuous process of formation of the qualified personnel and managers. The mechanisms through which technological spillovers are realized, are represented not only by the foreign direct investments made by multinational companies, but also by the strategic alliances, licence buying, licence change and the assistance accorded by foreign counselors, foreign and local suppliers of new materials, products and equipments. Despite the fact that the process of taking over new technologies by Romanian firms depends mainly on the decision of multinational companies, the success of technological transfers depends on the efforts made in the direction of taking over, assimilation, and bettering these absorbed technologies, and also by the level of training of the personnel. To conclude with, the technological transfer traffic is not free within the multinational firms and far less, outside them. Consequently, the Romanian economy can beneficiate only by a part of the scientifical and technological know-how. This is kept and conducted by the multinational companies and controled by them. The capacity of absorbtion of the new technologies depends on the relations that multinational subsidiaries keep with the local research centres, the economical politics promoted by subsidiaries as far as concerns the recruitment and the profesional formation, the purchase of products realized from the local suppliers, the sales realized on the Romanian market, the state policies concerning the attraction of foreign direct investment and the help accorded to the research and industrial innovation. This dispersion of technologies generates a reallocation of the working places, productivity externalities for the Romanian companies, know-how, and some imitative processes regarding the formation strategies of employees from the multinational companies.

• Item Type: MPRA Paper
• Language: English
• Keywords: multinational companies, foreign direct investments, technological transfer
• Subjects: F - International Economics > F2 - International Factor Movements and International Business > F20 - General; F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms ; International Business

References

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