Foreign direct investment
TNC FDI firms and domestic SME linkages: reflecting on three SADC case studies
Deepening gains from foreign direct investment
Authors:
G. Robbins; L. Lebani; M. Rogan
Publisher:
School of Development Studies, University of Kwazulu-Natal, Durban, South Africa, 2009
The research process underpinning this article was focused on casting some light on factors influencing the way in which developing countries can enhance linkages between Transnational Corporations (TNCs) and Foreign Direct Investment (FDI) firms and domestic Small to Medium Enterprises (SMEs). It sought to do this through identifying the major lessons from SME-TNC linkage programmes from three SADC case studies (Mozambique, Lesotho and South Africa).
The process of securing developmental impacts from FDI for developing countries has been a considerable challenge for many countries and has become a greater imperative in a context of relative declines in official development assistance in the past decade. Other authors have explained how FDI can compensate for domestic savings shortfalls and reduce balance-of-payments imbalances. This study tries to explore some ways in which FDI can contribute to lasting structural change in developing country production and productivity dynamics.
The case studies demonstrate that, whether it be at a national policy level (in Mozambique) or through a combination of sensitive national policy frameworks and robust local inter-firm networking (in the case of South Africa’s automotive sector) possibilities do exist to carve out opportunities for linkages that have the potential to deepen gains from FDI.
