Foreign Direct Investment Strategy of MNCs in the Context of Digital Transformation
Main Article Content
Abstract
Nowadays, the process of digital transformation and the introduction of a series of destructive technologies has revolutionized the way the companies do business and has important implications for the Foreign Direct Investment (FDI) pattern of Multinational Companies (MNCs). The objective of this paper is to point out the change in FDI strategy of MNCs in the new context through a review of existing studies. The results show that digitization can lead to the withdrawal of FDI, as it allows MNCs to enter foreign markets without having to be directly present there. Traditional markets- and tangible resources-seeking FDI may be partly weakened by digitization; and other forms such as knowledge-seeking and tax-and financial-driven FDI may become more important. There are also a number of other trends such as the FDI de-democratization, FDI financialization; the increase in investment of traditional MNCs in the digital sectors and the trend of digital companies acquiring non-digital assets.
Keywords:
FDI, digital transformation, multinational companies.
References
[1] K. Schwab, “The Fourth Industrial Revolution (World Economic Forum, Geneva)”, 2016.
[2] R. Bolwijn, B. Casella, J. Zhan, “International Production và the Digital Economy”, International Business in the Information và Digital Age: Emerald Publishing Limited, 2018, pp. 39-64.
[3] B. Casella, L. Formenti, “FDI in the digital economy: a shift to asset-light international footprints”, B. Casella, L. Formenti (2018), FDI in the digital economy: a shift to asset-light international footprints, Transnational corporations, 25(1) (2019) 101-130.
[4] Forbes, “The World’s Largest Public Companies”. https://www.forbes.com/global2000/list/#tab:overall/, 2019 (accessed 20 March 2020).
[5] UNCTAD, “World Investment Report 2017: Investment và the digital economy'”, United Nations Conference on Trade and Development, United Nations, Geneva, 2017.
[6] L. Eden, “Multinationals và foreign investment policies in a digital world” E15Initiative, International Centre for Trade và Sustainable Development and World Economic Forum, Geneva, www. e15initiative. org.
[7] J. Manyika, M. Chui, J. Bughin, R. Dobbs,
P. Bisson, A. Marrs, Disruptive technologies: Advances that will transform life, business, và the global economy, McKinsey Global Institute San Francisco, CA, 2013.
[8] R.D. Atkinson, L.A. Stewart, “Just the facts: The economic benefits of information và communications technology”, Information Technology & Innovation Foundation (ITIF), www2. itif. org/2013-tech-economy-memo. pdf.
[9] UNCTAD, Information economy report 2015-unlocking the potential of e-commerce for developing countries, United Nations, 2015.
[10] J. Manyika, S. Lund, J. Bughin, J.R. Woetzel, K. Stamenov, D. Dhingra, Digital globalization: The new era of global flows. McKinsey Global Institute San Francisco, 2016.
[11] OECD Digital Economy Outlook, 2015.
[12] OECD Digital Economy Outlook, 2017.
[13] Global Trends (2013) The emerging digital economy.nhttps://www.globaltrends.com/2013/06/06/gt-briefing-june-2013-the-digital-economy/, 2013 (accessed 20 March 2020).
[14] OECD, The Digital Economy. Executive Summary., Paris, France: OECD.
http://www.oecd.org/daf/competition/The-Digital-Economy-2012.pdf/, 2012 (accessed 20 March 2020).
[15] K.D. Brouthers, K.D. Geisser, F. Rothlauf, “Explaining the internationalization of ibusiness firms”, Journal of International Business Studies, 47(5) (2016) 513-534.
[16] A. Wittkop, K. Zulauf, R. Wagner, “How digitalization changes the internationalization of entrepreneurial firms: theoretical considerations và empirical evidence”, Management Dynamics in the Knowledge Economy 6(2) (2018) 193-207.
[17] J. Alcácer, J. Cantwell, L. Piscitello, Internationalization in the information age: A new era for places, firms, và international business networks? : Springer, 2016.
[18] W. Chen, F. Kamal, “The impact of information và communication technology adoption on multinational firm boundary decisions”, Journal of International Business Studies 47(5) (2016) 563-576.
[19] J. De la Torre, R.W. Moxon, “E-commerce và global business: the impact of the information và communication technology revolution on the conduct of international business”, Journal of International Business Studies 32(4) (2001) 617-640.
[20] S. Zaheer, S. Manrakhan, “Concentration và dispersion in global industries: Remote electronic access và the location of economic activities”, Journal of International Business Studies 32(4) (2001) 667-686.
[21] A.O. Laplume, B. Petersen, J.M. Pearce, “Global value chains from a 3D printing perspective”, Journal of International Business Studies 47(5) (2016) 595-609.
[22] R. Rezk, J. Srai, P. Williamson, “International configuration revisited: Assessing the impact of product và knowledge attributes và changes in technology on the choices available to firms”, Journal of International Business Studies 47(5) (2016) 610-618.
[23] N.A. Shaheer, Reappraising International Business in a Digital Arena: Barriers, Strategies, Context for Internationalization of Digital Innovations. University of South Carolina, 2019.
[24] B. Dachs, S. Kinkel, A. Jäger, “Bringing it all back home? Backshoring of manufacturing activities and the adoption of Industry 4.0 technologies”, Journal of World Business 54(6) (2019) 101017.
[25] R. Strange, A. Zucchella, “Industry 4.0, global value chains và international business', Multinational Business Review, 25(3), pp. 174-184.
[26] E.R. Banalieva, C. Dhanaraj, “Internalization theory for the digital economy”, Journal of International Business Studies, 2019, pp. 1-16.
[27] S. Rangan, M. Sengul, “Information technology và transnational integration: Theory và evidence on the evolution of the modern multinational enterprise”, Journal of International Business Studies 40(9) (2009) 1496-1514.
[28] M. Gestrin, J. Staudt, The digital economy, multinational enterprises và international investment policy, Paris: OECD, 2018.
[2] R. Bolwijn, B. Casella, J. Zhan, “International Production và the Digital Economy”, International Business in the Information và Digital Age: Emerald Publishing Limited, 2018, pp. 39-64.
[3] B. Casella, L. Formenti, “FDI in the digital economy: a shift to asset-light international footprints”, B. Casella, L. Formenti (2018), FDI in the digital economy: a shift to asset-light international footprints, Transnational corporations, 25(1) (2019) 101-130.
[4] Forbes, “The World’s Largest Public Companies”. https://www.forbes.com/global2000/list/#tab:overall/, 2019 (accessed 20 March 2020).
[5] UNCTAD, “World Investment Report 2017: Investment và the digital economy'”, United Nations Conference on Trade and Development, United Nations, Geneva, 2017.
[6] L. Eden, “Multinationals và foreign investment policies in a digital world” E15Initiative, International Centre for Trade và Sustainable Development and World Economic Forum, Geneva, www. e15initiative. org.
[7] J. Manyika, M. Chui, J. Bughin, R. Dobbs,
P. Bisson, A. Marrs, Disruptive technologies: Advances that will transform life, business, và the global economy, McKinsey Global Institute San Francisco, CA, 2013.
[8] R.D. Atkinson, L.A. Stewart, “Just the facts: The economic benefits of information và communications technology”, Information Technology & Innovation Foundation (ITIF), www2. itif. org/2013-tech-economy-memo. pdf.
[9] UNCTAD, Information economy report 2015-unlocking the potential of e-commerce for developing countries, United Nations, 2015.
[10] J. Manyika, S. Lund, J. Bughin, J.R. Woetzel, K. Stamenov, D. Dhingra, Digital globalization: The new era of global flows. McKinsey Global Institute San Francisco, 2016.
[11] OECD Digital Economy Outlook, 2015.
[12] OECD Digital Economy Outlook, 2017.
[13] Global Trends (2013) The emerging digital economy.nhttps://www.globaltrends.com/2013/06/06/gt-briefing-june-2013-the-digital-economy/, 2013 (accessed 20 March 2020).
[14] OECD, The Digital Economy. Executive Summary., Paris, France: OECD.
http://www.oecd.org/daf/competition/The-Digital-Economy-2012.pdf/, 2012 (accessed 20 March 2020).
[15] K.D. Brouthers, K.D. Geisser, F. Rothlauf, “Explaining the internationalization of ibusiness firms”, Journal of International Business Studies, 47(5) (2016) 513-534.
[16] A. Wittkop, K. Zulauf, R. Wagner, “How digitalization changes the internationalization of entrepreneurial firms: theoretical considerations và empirical evidence”, Management Dynamics in the Knowledge Economy 6(2) (2018) 193-207.
[17] J. Alcácer, J. Cantwell, L. Piscitello, Internationalization in the information age: A new era for places, firms, và international business networks? : Springer, 2016.
[18] W. Chen, F. Kamal, “The impact of information và communication technology adoption on multinational firm boundary decisions”, Journal of International Business Studies 47(5) (2016) 563-576.
[19] J. De la Torre, R.W. Moxon, “E-commerce và global business: the impact of the information và communication technology revolution on the conduct of international business”, Journal of International Business Studies 32(4) (2001) 617-640.
[20] S. Zaheer, S. Manrakhan, “Concentration và dispersion in global industries: Remote electronic access và the location of economic activities”, Journal of International Business Studies 32(4) (2001) 667-686.
[21] A.O. Laplume, B. Petersen, J.M. Pearce, “Global value chains from a 3D printing perspective”, Journal of International Business Studies 47(5) (2016) 595-609.
[22] R. Rezk, J. Srai, P. Williamson, “International configuration revisited: Assessing the impact of product và knowledge attributes và changes in technology on the choices available to firms”, Journal of International Business Studies 47(5) (2016) 610-618.
[23] N.A. Shaheer, Reappraising International Business in a Digital Arena: Barriers, Strategies, Context for Internationalization of Digital Innovations. University of South Carolina, 2019.
[24] B. Dachs, S. Kinkel, A. Jäger, “Bringing it all back home? Backshoring of manufacturing activities and the adoption of Industry 4.0 technologies”, Journal of World Business 54(6) (2019) 101017.
[25] R. Strange, A. Zucchella, “Industry 4.0, global value chains và international business', Multinational Business Review, 25(3), pp. 174-184.
[26] E.R. Banalieva, C. Dhanaraj, “Internalization theory for the digital economy”, Journal of International Business Studies, 2019, pp. 1-16.
[27] S. Rangan, M. Sengul, “Information technology và transnational integration: Theory và evidence on the evolution of the modern multinational enterprise”, Journal of International Business Studies 40(9) (2009) 1496-1514.
[28] M. Gestrin, J. Staudt, The digital economy, multinational enterprises và international investment policy, Paris: OECD, 2018.