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Section 2 presents the data and shows some descriptive statistics on FMNEs, DMNEs and NMNEs disaggregated by firm size.
On the one hand, the "footloose" character of MNEs is justified by the fact that, as part of an international production network, these firms can easily relocate production between countries in response to adverse shocks in the host country (FMNEs) or to changes in local costs (DMNEs).
In this context, FMNEs may have a higher probability of survival because on the one hand foreign capital participation may itself be signalling unobserved quality of the affiliate firm (cherry-picking hypothesis), and/or on the other, it may be a vehicle for access to more advanced foreign technologies and, therefore for improving firm efficiency.
(a) Export spillovers may occur when an indigenous firm directly enters into an FMNE's supply chains abroad using the FMNE's brand name, distribution networks and reputation (Buck et al.
FMNE presence may generate a simultaneous negative effect on indigenous firms' exports and domestic sales.
2.4 Hypotheses About FMNE Presence and Indigenous Firms' Exports and Domestic Sales in China
an MNE (or FMNE) and, therefore, should be sourced according to the
FMNEs. The financial income of FMNEs is derived almost entirely from
FMNE's activities in each jurisdiction in which it operates.
states that tax authorities should allocate functions to FMNE branches
The first theme of this study suggests that FMNE research can benefit from modeling simultaneous competitive interactions (Henderson/Mitchell, 1997).
In sum, this study integrates supply- and demand-side perspectives of FMNE strategic management.
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