Constantina Kottaridi

The Multinational Corporation and the Global Sourcing of Knowledge: Remodeling Absorptive Capacity

We build on extant theory of the MNC, MNC subsidiaries, absorptive capacity and Penroses concept of productive opportunity to develop a framework on the MNC and absorptive capacity (AC) that allows us to explore the role of subsidiaries in the global sourcing of knowledge. We develop and test hypotheses using primary questionnaire-collected data. Our results support the idea that subsidiaries realized AC can be improved by the realized and potential AC of the MNC group and the subsidiary and in turn may improve the performance of the subsidiaries and the group as a whole.

Complements or Substitutes? New Theoretical Considerations and Empirical Evidence on the Imports and FDI Relationship

Central and Eastern European countries with the liberalisation process and the recent accession to the EU are, nowadays, well engaged in trade with partner countries and at the same time receive significant and increasing interest from foreign investors. Trade and Foreign Direct Investment can potentially enhance economic growth and development as widely evidenced in the literature; hence their relationship may be of particular interest for the region especially in the context of an enlarged EU. This paper addresses the imperative need to understand the relationship of FDI and trade as well as international investors’ behaviour by developing a new theoretical approach and providing empirical evidence. We use the most expanded data span in the current literature, from the early stages of transition in 1992 to 2006 and an enriched dataset of countries, sectors and location factors. In regards to the inward FDI vs. imports relationship, results comply with our theoretical formulation and strongly indicate an overall complementarity with each other. In the case of FDI we find strong locational characteristics such as the large market size, the gradual improvement of the macro-environment and finally the quality of labour force to play a positive role.

Determinants of MNE Subsidiaries Decision to Set Up Own R&D Laboratories - Theory and Evidence

We explore the determinants of MNE subsidiaries decisions to set-up own R&D laboratories drawing on evidence from UK regions. In this context, we also test for the interaction between firms internal and external environments. We also integrate extant IB and strategic management literatures and incorporate recent debates in New Economic Geography (NEG) in specifying the external environment. We find support for the role of firms productive opportunity and predictions of the NEG on the basis of an analysis of primary data. We discuss implications for managerial practice and government regional policies.

Inflation Dynamics and the Cross-Sectional Distribution of Prices in the E.U. Periphery

We explore the connection between inflation and its higher-order moments for three economies in the periphery of the European Union (E.U.), Greece, Portugal and Spain. Motivated by a micro-founded model of inflation determination, along the lines of the hybrid New Keynesian Phillips curve, we examine whether and how much does the cross-sectional skewness in producer prices affect the path of inflation. We develop our analysis with the perspective of economic integration/inflation harmonization (in the E.U.) and discuss the peculiarities of these three economies. We find evidence of a strong positive relation between aggregate inflation and the distribution of relative-price changes for all three countries. A potentially important implication of our results is that, if the cross-sectional skewness of prices is directly related to aggregate inflation, not only the direction but also the magnitude of a nominal shock would influence output and inflation dynamics. Moreover, the effect of such a shock could be received asymmetrically, even when countries share a common currency.