The Strategic Development of Foreign-Owned Subsidiaries and Direct Employment in Host Locations in the United Kingdom

Frank McDonald, Heinz-Josef Tüselmann, Svitlana Voronkova and Pavlos Dimitratos
Additional contact information
Frank McDonald: Hull University Business School, University of Hull, Cottingham Road, Hull HU6 7RX, England
Heinz-Josef Tüselmann: International Business Unit, Manchester Metropolitan University, Aytoun Building, Aytoun Street, Manchester M1 3GH, England
Svitlana Voronkova: Institute for International Integration Studies, Trinity College Dublin, The Sutherland Centre, Arts Building, Dublin 2, Ireland
Pavlos Dimitratos: Athens University of Business and Economics, and Strathclyde International Business Unit, University of Strathclyde, 173 Cathedral Street, Glasgow G4 0RQ, Scotland

Environment and Planning C, 2005, vol. 23, issue 6, 867-882

Abstract: The authors use international business strategy and regional development literature to inform a set of propositions about the links between direct employment by foreign-owned subsidiaries in the manufacturing sector and the development of embeddedness and autonomy in these subsidiaries. A large-scale survey of French, German, and US manufacturing subsidiaries in the United Kingdom is used to test the importance of embeddedness (host-country sourcing and use of networks) and autonomy (decisionmaking and operational autonomy) for the growth of employment by foreign-owned subsidiaries and the growth of skilled jobs in such subsidiaries. The results indicate that growth of embeddedness and autonomy factors are important, especially for the growth of skilled jobs, but those subsidiaries that have this attribute are a minority of foreign-owned subsidiaries. In the light of these results, the authors argue that policies need to be geared towards developing embeddedness and encouraging the growth of autonomy in subsidiaries that are likely to be regarded as central to the overall objectives of multinational corporations (MNCs). This requires policymakers to be aware of the internationalisation strategies used by MNCs, particularly in the light of the emergence of new, low-cost, countries which can easily provide high-quality but low-cost manufacturing operations. An important conclusion is that simple promotion of networking among firms and supporting agencies, and attempts to improve the local asset pool are unlikely to be effective in most cases.

Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1068/c0443 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:envirc:v:23:y:2005:i:6:p:867-882

DOI: 10.1068/c0443

Access Statistics for this article

More articles in Environment and Planning C
Bibliographic data for series maintained by SAGE Publications ().