Foreign Customers Research Articles

FDI and the Structure of Home Country Production

This paper provides a selective survey of the literature on home country effects of FDI, and points to some new questions regarding the impact of outward FDI on economic structure in the home country. Much of the existing literature on production interactions between the domestic and foreign operations of MNCs has examined what happens to home country exports and employment as a result of outward FDI. Although the results of earlier studies vary somewhat, there appears to be a consensus that the quantitative effects are not dramatic. The reduced exports of finished products from the home country to independent foreign customers are balanced by increases in exports of intermediate products to the foreign affiliates. However, the structural changes ? the transformation that occurs when the parent company becomes increasingly specialised in the production of intermediate goods ? have not been discussed in great detail. Drawing heavily on the example of Sweden, we outline some of the changes that have occurred as a result of the increasing globalisation of Swedish industry, and discuss some possible consequences for the Swedish economy. Our discussion suggests that the home country operations of Swedish MNCs focused increasingly on activities with relatively high raw material content and low value added during the period between the early 1980s and mid-1990s. In addition, much of R&D was concentrated to Sweden. While the high investments in R&D are probably beneficial for the home country, it is possible that the specialisation in raw material intensive operations may have some negative effects. In particular, we discuss the possible growth effects of a more concentrated industry structure. However, due to the lack of detailed data on production structure, factor intensities and other production characteristics, the discussion is largely speculative, and the paper points to the need for more data and more research in this area.

The SME Advantage: Adding Local Touch to Foreign Transnational Corporations in Singapore

The fast-changing nature of technology and the high-quality requirements of manufactured products have altered the role of suppliers from passive manufacturers to proactive and innovative manufacturers. In Singapore, many local small and medium enterprises (SMEs) are suppliers to foreign transnational companies (TNCs), providing them with parts and components and other kinds of production-related services. This paper examines the areas in which local SME suppliers play an important role in transferring expertise to their foreign TNC customers. This 'reverse transfer' contradicts the conventional wisdom of technology transfer from giant TNCs to their SME suppliers via supplier-buyer linkages or subcontracting relations. To support our propositions, we conducted a postal survey of 41 local SMEs and interviews with representatives of nine SMEs. Empirical findings show that local SMEs are more capable than their foreign TNC customers in such aspects as local knowledge and soft technology. Local knowledge includes local technical specifications, standards, management styles and local culture. Furthermore, the presence of such expertise in soft technology as process and product technologies has led local SME suppliers to participate more in customers' product designs. At a national scale, local knowledge and expertise in soft technology embedded in Singapore's supporting industries can enhance the locational or 'L' advantage of Singapore. Le caractère évolutif de la technologie et les besoins qualitatifs des produits manufacturés ont changé le rôle des fournisseurs, des fabricants passifs aux fabricants actifs et innovateurs. Au Singapour, beaucoup des petites et moyennes entreprises locales (Pme) sont les fournisseurs des entreprises étrangères transnationales, leur fournissant des pièces détachées et d'autres services liés à la production. Cet article cherche à examiner dans quels domaines les Pme locales jouent un rôle important dans le transfert de l'expertisè aleurs clients que sont les entreprises étrangères transnationales. Ce 'transfert à rebours' va à l'encontre des idées reçues sur le transfert de la technologie des mastodontes transnationales aux Pme à partir des rapports fournisseur-acheteur ou de la sous-traitance. Afin de corroborer ces propositions, on a menéune enquête par correspondance auprès de 41 Pme locales et on a interviewé des représentants de neuf Pme. Les résultats empiriques laissent voir que les Pme sont plus compétentes que ne le sont les entreprises étrangères transnationales quant à leur connaissance du milieu local et du logiciel. La connaissance du milieu local comprend les spécifications techniques locales, les normes, les modes de gestion et la couleur locale. Qui plus est, la présence d'une telle expertise dans le domaine du logiciel, telles les technologies liées aux procédés et aux produits, a encouragé les Pme à participer davantage à la conception des produits de leurs clients. A l'échelle nationale, la connaissance du milieu local et l'expertise dans le domaine du logiciel, ancrées dans les industries annexes du Singapour, pourrait augmenter l'avantage de localisation du Singapour, à savoir l'avantage 'L'. Die rasch wechselnde Natur der Technologie und die hohen Qualitätsanforderungen an Fertigerzeugnisse haben die Rolle des Zulieferers von der eines passiven Produzenten auf die eines vorausschauenden und innovativen Herstellers umgestellt. In Singapur werden ausländische transnationale Körperschaften von kleinen und mittelgroßen ortansässigen Unternehmen mit Teilen, Komponenten und anderen herstellungsbezogenen Dienstleistungen beliefert. Dieser Aufsatz untersucht Gebiete, auf denen SME Zulieferer eine bedeutende Rolle bei der Übernahme ihrer Fachkenntnisse durch ausländische TNC Kunden spielen. Diese 'gegenläufige Übernahme' widerspricht der herkömmlichen Überzeugung der Fachwissenübernahme der SME Lieferanten von riesigen TNCs auf dem Wege der Zuliefer-Ankäuferverknüpfungen oder Unterkontrahentenbeziehungen. Zur Unterstützung ihrer These haben die Autoren auf dem Postwege eine Umfrage unter 41 ortsansässigen SMEs und Interviews mit Vertretern von neun SMEs durchgeführt. Empirische Befunde zeigen, daß ortsansässige SMEs in Dingen wie Ortskenntnis weiche Technologie weitaus fähiger sind als ihre ausländischen TNC Kunden. Ortskenntnis schließt dabei örtliche technische Spezifikationen ein sowie Standards, Führungsstil und örtliches Kulturwesen. Darüberhinaus hat das Vorhandensein von Fachkenntnissen in weicher Technologie wie Verfahrenstechnik und Produkttechnologie ortsansässige SME Zulieferer veranlaßt, sich vermehrt an Kundenentwürfen für Produkte zu beteiligen. Aufs Landesganze gesehen können ortsansässige Kenntnisse und Fachwissen in weicher Technologie, die in Singapurs unterstützender Industrie verwurzelt sind, den Standort oder 'L' Vorteil Singapurs nur erhöhen.

Hull Structural Scantlings of the Golden Series Otoryacht

The paper describes the procedures for scantlings of some hull structural elements from FRP materials. The solution and software are based on the rules of classification societies GL-BV-RINA. It allows to estimate the optimal skin-plating thickness and other dimensions of the stiffeners. These procedures are applied for design of the large high-speed craft Golden Series designed for the open-sea class. The luxurious yachts built in Bratislava shipyard for foreign customer.

Research note: How a small business enters the international market

AbstractAs the rate of economic globalization becomes faster and faster, small businesses in the United States can no longer afford to ignore the challenge of international commerce. Small businesses are a key factor in the economies of all nations. Small businesses must develop a global culture, challenge the attitude of key decision makers, gain crucial international experience, and overcome the size barrier. This requires successful entry‐wedge strategies if the company hopes to have any chance of success. Many will need external support in finding ways to access foreign customers. This article provides information that can help small businesses with this venture. © 2001 John Wiley & Sons, Inc.

The character of bridgehead relationships

A supplier's development of a foreign market can be better understood when examined in the context of bridgehead business relationships between a supplier and a foreign customer. In addition to intrarelationship factors, the network of business relationships connected with a supplier and its foreign customer is also important in understanding the supplier's bridgehead relationships. The results from a LISREL analysis of 142 international business relationships show that the supplier's bridgehead relationships are conditioned by the personal relations with the foreign customer. The supplier's bridgehead relationships are also dependent on mutual commercial dependence between the supplier and the foreign customer. The results show that the supplier views the foreign customer as a conduit for foreign market development and will commit itself to the business relationship for this reason. A further finding is that the network of business relations connected with a supplier and its foreign customer constitutes an important setting for the supplier's bridgehead relationships.

Types and Sources of Export Information: Insights from Small Business

DR. LEONIDAS C. LEONIDOU IS ASSOCIATE professor of marketing at the University of Cyprus and Athena S. Adams-Florou is a doctoral candidate in management at the University of Bath, England. This paper reports the findings of an empirical study on the information behaviour of 80 exporters based in Cyprus. With regard to types of information needs, the study revealed that information on foreign customers was the most influential overall, followed by product aspects, market preference, and pricing issues. Exporters were also found to rely more on personal rather than impersonal sources in gathering information about foreign markets. In examining the relationship between types and sources of export information, it was shown that specific types of information are strongly correlated with certain sources. Moreover, the number of sources from which information was obtained differed in accordance with the specific information type. Finally, some of the associations between these two dimensions were somewhat paradoxical, while others were attributed to the specific role performed by developing country-based exporters in overseas markets.

Iron ore production and trade in Russia

Abstract The main question put forward in this paper is: Will Russia become a major competitor in the European iron‐ore market? The main purpose is to put the former world's largest producer of iron ore, Russia, back on the “iron‐ore map”;. Using production and trade figures for 1990 and 1995 and mine‐specific data on capacity, production, products, geographic position and foreign trade for every mine in Russia, it is generally concluded that while some facts favor Russia, others do not. The long distances between the mines and foreign customers, with the accompanying freight costs, certainly do not favor Russia. Among those that do is the fact that ore at the seven exporting mines is of high quality magnetite with an iron content generally well above 60%. As magnetite ore is cheaper to pelletize than hematite ore, Russia might possess a still unexplored competitive advantage.

USING EXPORT‐CREDIT INSURANCE TO ENHANCE THE WORKING CAPITAL REQUIREMENTS OF THE OVERSEAS CUSTOMER: ACCOMMODATING MEXICAN IMPORTERS AMIDST THE 1994–95 PESO CRISIS

While export‐credit insurance is traditionally utilized by exporters to protect foreign receivables, to facilitate domestic financing, or to match credit terms of competitors, there is an interesting fourth function. The exporter targeting a creditworthy foreign customer within a country undergoing a temporary economic disruption can use export‐credit insurance to provide a key addition to the foreign customer's working capital needs. This paper quantifies the working capital gains for a Mexican importer when a U.S. exporter liberalizes payment terms by using export‐credit insurance and so alleviates the importer otherwise confronting sharply higher short‐term domestic borrowing costs and a depreciating peso.

Export stimulation research: Review, evaluation and integration

This paper deals with a review, evaluation and integration of available research on the factors stimulating initiation and subsequent development and sustainment of export operations. The review focused on 30 studies conducted mainly in North American and European countries. The investigation revealed that research on the subject is still at the identification and conceptualization stage, due to incomplete conceptual foundations, unsophisticated methodologies and inconsistent research findings. An aggregate analysis of the available empirical data revealed that unsolicited orders from foreign customers exhibited the highest stimulating effect. The nature of export stimulation was also found to be affected by a number of methodological parameters. A classification of the stimuli by combining the internal/external and proactive/reactive typologies revealed more or less the same stimulating impact amongst the resulting groups.

A critique of Western philosophical ethics: Multidisciplinary alternatives for framing ethical dilemmas

American discourse in business ethics is steeped in the traditional ethical theories of Western philosophies, specifically the Greek classics, Kant, and the British Utilitarians. These theories may be largely uninterpretable or unacceptable to non-Western populations owing to different traditions, religious beliefs, or cultural histories. As economic boundaries collapse and markets become more global in scope, traditional Western ethical thought may lead to clashes among Western organizations and companies from differing cultural settings. Such clashes could lead to alienation of foreign customers, firms and governments and resultant competitive disadvantage, or to an abandonment of ethical considerations altogether in the struggle to compete internationally. This paper puts forward two general alternatives to Western ethical philosophies as useful frameworks for the analysis of international ethical dilemmas. The first alternative uses new organizational economics, while the second emphasizes role relationships and organizational citizenship.

Letters of credit in the global economy: Implications for international trade

Commercial letters of credit have been used for centuries to facilitate payment in international trade transactions. A letter of credit is a financial instrument, usually issued by a bank, which guarantees the seller will receive payment for goods sold to a foreign customer. Using a third-party payment mechanism helps importers and exporters maintain strong and effective business relationships. However, recent changes in both generally accepted accounting principles and in the courts'interpretation of the Uniform Commercial Code, which governs such transactions, may impair the use of letters of credit in the future. This paper examines these changes and discusses potential implications for not only importers and exporters but issuers as well.

Document Delivery at the Indian National Scientific Documentation Centre

Provides a brief background to the document delivery service in India with particular reference to the Indian National Scientific Documentation Centre (INSDOC), which began its service in 1953. Analyses the service with respect to its performance, customer segments, geographical distribution of customers, subject matter availability, subject matter demand from foreign customers, age of journals requested and numerical distribution of requests across the range of journals available. Gives an account of intended future developments.

The impact of the Soviet collapse on military relations with India

INDIA TODAY is a leading second-rank military power; its power was built with significant Soviet assistance. The Soviet Union has disintegrated; what will be the impact on India's defence posture? Problems were inevitable, for five sets of reasons. First, leaders in Moscow had concluded that a major contributor to their economic impoverishment was the alarming rate of military build-up. Second, the West had been especially alarmed by Soviet military links with a number of Third World countries. Defence was therefore to be reined in as an instrument of foreign policy. Third, defence production in the former Soviet Union (FSU) had been organised on a one-market basis. There was no comparative specialisation among the various constituent republics along particular lines of production. The break-up of the Union therefore disrupted defence production and deliveries to foreign customers. For example, Indian officials spent some time trying to identify the estimated 3500 suppliers scattered around the new republics who manufactured the military equipment that India needed.1 Fourth, moves by the FSU towards an open economy and currency convertibility meant that the method of payment had to be renegotiated with those countries that had conducted barter trade with the FSU. And fifth, negotiations had to be conducted to work out to mutual satisfaction how India's previous defence debt to the FSU was to be apportioned among the new republics and how, with the ruble in a free fall, the value of the ruble debt would be recalculated. While India was understandably jolted by all this, there was also empathy with a country undergoing the throes of partition: the division of an integrated defence force among successor states was a familiar experience to Indians.

The Export Behavior of Small Canadian Manufacturing Firms∗

This paper reports on a survey of the export behavior of small Canadian manufacturing firms. An analysis of tables (ANOTA) model is used to describe the relationship between export performance and market characteristics. The export transactions of these firms are also examined using ANOTA and latent class analysis. The relationship between export experience and geographic diversification predicted by stages of development models is confirmed. In addition, two types of export transactions are identified: (1) active exports that help firms reach a market of sufficient size and (2) passive exports in response to demand from foreign customers.

International 800 opens new doors for business overseas

AbstractCompanies can economically establish an international presence by installing an international toll‐free line linking them to potential foreign customers.

An examination of authentic dialogues for use in the ESP classroom

There have been theories concerning the role of prefabricated units in language production since the mid 1970s. Recent work in corpus linguistics has highlighted the importance of these fixed and variable units in speech and writing and has led to an awareness of the need to help language students learn and use these units appropriately. This paper outlines a teaching approach for oral ESP which inputs chunks of natural language orally which can be segmented by the learner into fixed and variable units and at the same time makes the learners aware of the paradigmatic, syntagmatic and phonological aspects of the language being taught. The teaching method makes extensive use of pictograms and ideograms as mnemonics and advance organizers to make language drills and practice meaningful by relating the language being taught to the learners' knowledge of the real world.

THE CHINESE LOOK TO WORLD MARKETS

Only in recent years has China been concerned about participating in the world economy. Thus far her international marketing has been limited in volume and elementary in nature. Currently China is relying primarily on her foreign partners and customers to do her international marketing as she lacks the know‐how and contacts to do an effective job herself. This will change as China moves down the learning curve. Indeed, China could become a major international marketing power before the end of this century if economic liberalisation is not stopped or reversed.

Chemical Capital Spending To Jump 20% in 1988

Capital expenditures by U.S. industry will show a healthy increase in 1988 compared with 1987, according to preliminary forecasts by leading chemical producers. Eleven of 12 major chemical companies surveyed by C&EN estimate their 1988 expenditures will rise 20% to $6.84 billion compared with 1987. (Du Pont, the biggest chemical capital spender, had not responded with its 1988 estimate at press time.) The 1988 forecast follows a modest 6% increase in capital spending in 1987 compared with the previous year. Chemical producers apparently feel that, despite a weak domestic economy, their sales to foreign customers are on the upswing. According to Charles B. Reeder, head of Charles Reeder Associates and former chief economist at Du Pont, the chemical industry, like the textile and paper industries, is running flat out. The decline in the value of the U.S. dollar has led to increased exports as well as some substitution for imported goods by domestic production. Reeder ...

The Slack Is Gone: How the United States Lost Its Competitive Edge in the World Economy

T mmediately after the Second World War the United States enjoyed a crushing economic advantage because its productive machinery was more modern than anyone else's (and had not been bombed). But by the early 1970s, the forces that would eventually destroy South Chicago were being set in motion around the world. As investment capital became more mobile, companies were freer to shop for locations with lower wages and better climates, whether in Tennessee or Taiwan. The oil-price increases engineered by OPEC in 1973, and the resulting inflation, reduced the standard of living for most Americans-but not for workers in the heavy industries, whose unions had negotiated the cost-of-living adjustments known as COLAs. This was a temporary advantage for them and a long term disaster for their industries. During the late 1970s, when chronic inflation eroded the dollar's value in international trade, American goods became artificially attractive to foreign buyers-and American manufacturers were lulled into an artificial sense of security about their ability to compete. They were not prepared to adapt when circumstances changed in the early 1980s and an overvalued dollar drove their foreign customers away.' It is by now no secret that, in recent years, the economic performance of the United States has declined, especially when compared with that of other nations such as Japan. On the other hand, little careful analysis has been done on why this has occurred. Such an analysis is more critical than ever, but before we as a nation can determine how to regain our competitive edge, it is first necessary to understand the factors that shaped the old way of doinig business and why the old paradigm no longer applies. Only then can we look clearly at the new and new organizing assumptions that are essential to success in today's environment. In the pages that follow, we will consider the factors that are responsible for the recent economic difficulties of the United States: the evolutionary path of the modern U.S. corporation and the kinds of consumer markets it created to complement its organizational structure; the special kinds of labor-management agreements that evolved as a result; and the role the government assumed in managing the U.S. economy. In addition, the predominant position that until recently the U.S. had commanded in world markets contributed to its failure and, paradoxically, as a result of enormous successes, not failures, in managing the domestic economy, this nation was that much more vulnerable to the various world crises of the mid-1960s and 1970s. Finally, the refusal of Third World countries to play along with the rules of the game according to conventional economic theory added to our economic problems. To put it succinctly, the hardships we are currently experiencing are directly traceable to a failure to understand the critical role played by every one of these factors.2

L'évolution récente .du contrôle des changes en Pologn

Recent developments in exchange control in Poland. Since 1982, exchange control has been influenced, on the one hand, by two major factors, and on the other by the advent of the economic reform of January 1st, 1981, and an acute shortage of foreign currency, due to the cessation of payments in March 1981, and to the economic sanctions which followed the introduction of martial law. The economic reform went some way towards liberalizing the structure of external trade. National and foreign trade planning lost their command status, and the monopoly enjoyed by the specialist organizations of the Ministry was subject to reconsideration. Henceforth, foreign trade operations could also be affected by other state or social enterprises, by mixed enterprises and by private individuals who had obtained the appropriate concessions. Enterprises were also given the right to keep a quota of the foreign currency accruing from their exports in order to finance imports on their own account. The system was to be complemented by foreign currency credits and auctions (a kind of currency stock exchange). The acute shortage of hard currency which persisted in Poland after the declaration of martial law delayed these reforms. The scope of the concessions was limited by the exclusion of certain commodities and certain foreign customers. A delay was imposed on the payments for imports by using the currency quotas allowed to exporting enterprises, and a limit was placed on the number of enterprises allowed this concession. Every attempt at liberalization of the exchange control system was nullified by the centralized allocation of convertible currency, which was imposed more strictly then ever. The new exchange control law of 1983 relating to individuals is still, despite appearances, very restrictive. Polish nationals may hold foreign currency, but may only use it within the provisions of the law or appropriate enactments, or with the express permission of the authorities. After the introduction of martial law, the liberal measures governing special currency accounts were suspended, and use of them was blocked. The raising of these restrictions has been slow and piecemeal ; private currency holdings are forbidden, and paying them into a special account is temporarily blocked. Increasing emphasis has however been placed on the special hard currency shops (Pewex) and on the privileges of mixed enterprises in respect of the use of hard currency and the repatriation of profits. The switch to a single exchange rate, which came into effect on 1st, January 1982, accompanied by a de facto devaluation of the Rouble, does not seem to have put an end to multiple rates. Nor has it brought about a greater degree of standardization in the fixing of exports prices for transactions not exceeding 35 % of turnover. A complex system of subsidies, exemptions, write-offs and regulatory accounts (similar to the famous Preisausgleich) distorts the play of the market forces by freeing national enterprises from internal or external competition. The exchange rate plays no positive role and continues to have little influence on enterprise behaviour. The persistence of shortage and inflationary pressure puts a brake on implementation of the economic reform, and reinforces the pressures for further resort to mutiple exchange rates according to the nature of the transaction.