How TNC subsidiaries shine in world cities: policy implications of autonomy and network connections

Frank McDonald, Jens Gammelgaard, Heinz Tüselmann and Christoph Dörrenbächer

UNCTAD Transnational Corporations Journal

Abstract: The study examines the relationship between performance and patterns of autonomy and the network relationships used by the foreign subsidiaries of transnational corporations (TNCs) in world cities compared to those subsidiaries outside these locations. This is done by exploring if these patterns differ in foreign subsidiaries in Greater Copenhagen compared to elsewhere in Demark. The findings reveal that there are important differences in the relationships between performance and the autonomy and network structures in foreign subsidiaries. These findings are discussed and policy implications distilled. The study finds that the scope of inward foreign direct investment (FDI) policy could be usefully extended to encompass urban development thereby helping cities develop assets, institutional support and infrastructure that can enhance agglomeration benefits and global connectivity. The findings indicate policies, aimed at helping subsidiaries embed in host location networks and incorporate these networks into other parts of the parent company, could be beneficial. The paper also discusses economic and social inequality that can stem from network patterns and the inclination of subsidiaries to operate autonomously in world cities. It proposes policy options that can lead subsidiaries to undertake high-value activities and innovation in world cities.

Date: 2020-04-01
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Persistent link: https://EconPapers.repec.org/RePEc:unc:tncjou:36

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