Academic journal article The Canadian Geographer

How Green Is the Valley? Foreign Direct Investment in Two Norwegian Industrial Towns

Academic journal article The Canadian Geographer

How Green Is the Valley? Foreign Direct Investment in Two Norwegian Industrial Towns

Article excerpt

Depuis le debut des annees 1900, les investissements directs d l'etranger (IDE) ont grandement marque la societe norvegienne, notamment dans les communautes peripheriques. Cet article presente une analyse de la facon dont les entreprises transnationales (ETN) exploitent le territoire y compris le niveau local. Il tente aussi d'expliquer comment la relation complexe entre les entreprises et les espaces depend des attributs propres aux ETN et des caracteristiques de l'economie locale. Un courant important de la litterature etudie les nombreuses incidences et repercussions des ETN, comme les relations d'offre verticale et les effets indirects. Cependant, les discussions qui s'ensuivent presentent generalement peu d'explications d'ordre theorique concernant les resultats. La litterature associe les resultats positifs ou negatifs directement aux conditions locales et aux motivations qui poussent une entreprise d placer ses capitaux dans un IDE. Elle aborde a peine la question sur comment les resultats peuvent varier selon les types d'entreprises, de communautes et d'economies nationales, et comment ces interactions produisent des resultats differents. En conclusion, nous rappelons que les IDE disposent de plusieurs possibilites de transformer un milieu. Un investissement peut produire une dependance au sentier qui accentue la soumission quand le capital economique domine, et une dependance au sentier qui accentue le developpement quand il offre un equilibre entre le capital economique, les reseaux sociaux et le savoir. Une analyse empirique permet de relever cette variation qui caracterise les incidences des IDE. Elle porte sur deux villes moyennes industrielles situees dans la partie occidentale de la Norvege. La premiere est riche en ressources naturelles tandis que l'autre est dotee de ressources technologiques intangibles.

Introduction

The process of globalisation increases the importance of foreign ownership in the operation of firms and makes foreign direct investment (FDI) an interesting subject for the analysis of local development. The literature discussing FDI has focused on how local conditions and motives behind FDI form local effects (Young et al. 1994; Dunning 1995, 1998; Amin and Cohendet 1999; Nachum and Keeble 1999). FDI generates different local effects, such as vertical supply linkages, spin-offs, knowledge spillovers and welfare effects. These effects vary according to both general economic, regulative and political national conditions and place-specific conditions and the underlying motives of FDI. Further, these factors and market conditions may change over time.

The FDI literature demonstrates that interaction between FDI and local conditions can be generalised to generate two main types of outcome (Giarratana et al. 2003). By the term outcome, we understand the collective result and effects of an event. The first outcome may be labelled FDI as development. This characterises a situation in which there are extensive local effects of FDI, such as vertical linkages, knowledge spillovers, spin-offs, innovation networks and technology transfer. The second outcome may be labelled FDI as dependency. This is a situation in which the local effects of FDI are restricted to employment in subsidiaries, taxes and some vertical supply linkages.

Theoretical explanations of outcomes are harder to grasp. The literature links positive as well as negative outcomes to local conditions and to investment motives of the entity making the FDI, but says little about the type of FDI and the interactions that generate FDI as development or FDI as dependency. In this article, we develop a model to address this issue. We argue that FDI consists of economic capital, networks and knowledge that, when interacting with given local conditions, can generate different forms of dependency or development. In an analysis of two Norwegian industrial towns, the usefulness of this model is examined. The analysis aims to explain:

* the history of FDI in these industrial towns;

* the local effects that are generated by the FDI;

* the interaction between the characteristics of the FDI, local conditions and local effects. …

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