This paper investigates the relationship between the value capture of multinational subsidiaries and functional upgrading, which is defined as a diversification of employment from primary business functions to higher value adding activities such as ICT, R&D, marketing or logistics. By combining survey-based business function indicators with longitudinal accounting data for a representative sample of multinational subsidiaries located in six Central and Eastern European countries (CEECs), we assess the impact of functional upgrading on foreign subsidiaries' value capture. The results provide robust evidence that the breadth as well as the scope of functional upgrading induces an upward shift of subsidiaries' value added. The effect of functional upgrading is stronger in the earlier phases after entry of the foreign investor, while the long-term growth trend remains unaffected.
COBISS.SI-ID: 35191389
Exporting is a vital source of growth for Central and Eastern European emerging economies. Market liberalization at home and the rapidly changing global business environment have forced small and medium emerging-market firms to radically change their growth strategies by focusing on internationalization. As a consequence, the number of first-time exporters originating from European emerging markets has increased. The success of first-time internationalization however is not guaranteed for all emerging-market firms; failure rates in this process remained high and this calls for further examination of the internationalization strategies and patterns of internationalization. We study changes in internationalization patterns, by examining the strategies of new exporters from a small European emerging market. We explore how successful new exporters differ from unsuccessful ones by focusing on firms’ foreign market export destinations and exported product varieties. The analysis of firm-level data for Slovenian first-time exporters over the period 1994 -2010 revealed that successful international growth is related to an increased diversification in internationalization. By intensifying both geographical and product diversification first-time emerging-market exporters increased the probability of survival in export markets. Considering the predicaments of the Uppsala model of gradual (less risky) internationalization, we found that successful first-time exporters are more risk prone as they tend to follow more diversified internationalization strategies. Step-wise approach to internationalization by following a more focused exporting strategy diminishes emerging-market firms’ survival chances.
COBISS.SI-ID: 34491741
Smart specialisation is now a major idea behind the European Commission’s cohesion policy reforms in the field of innovation, and it must be applied by European Union member countries in order to secure funding under the 2014–2020 European Union budget, even though the concept itself has only recently emerged. The success of translating this policy into practice depends on a thorough analysis of regions’ and countries’ potential for innovation based on empirical evidence. Currently, countries use a wide array of methods to define priority areas, but these have, for the most part, failed to address the challenges of this process. This article explores the data that can be used in the prioritisation process of developing a smart specialisation strategy. The approach follows the main recommendations for profiling regions and countries, uses data already available at the national statistical offices, and is based on indicators that can be grasped intuitively by policymakers. It includes data on each relevant aspect of smart specialisation, that is, economic, scientific and technological specialisation, as well as the entrepreneurial discovery process. This article demonstrates the approach using a case with Slovenian data; the results suggest that it can be an effective tool for narrowing down a list of industries to be considered for a smart specialisation strategy.
COBISS.SI-ID: 22648806