National Chengchi University’s (NCCU) Center for Business Sustainability hosted a talk titled “To Enter or Not to Enter Clusters? Navigating Multinational Corporations’ Dispersed Resources in Foreign Investment Locations,” held on 27 December 2024. The talk was given by Ms. Der-Ting Huang, a PhD candidate whose dissertation won the AIB award for best doctoral dissertation proposal, and who will begin her teaching career in the fall of 2025 as an Assistant Professor at the Copenhagen Business School.
Ms. Huang’s talk drew on a recently published paper that questioned the role multinationality plays in Multinational Corporations’ (MNCs) decision in choice of locality for foreign investments. Ms. Huang’s research challenged normative definitions and understanding of the topic at large. Examples, like Canon, showcase a company’s ability to set up foreign investment in low industrial clustered cities away from established clusters that possess “highly concentrated value chains.” Her paper sought to understand motivations factored into such decisions. The methodology used to calculate results includes a new approach to an existing equation to test the multinationality of an enterprise, as well as two equations on the relativity between sources of input in the multinationality of a corporation. She challenged the notion that an MNC was a single-unit entity, arguing that since MNCs were multi-locational, it shouldn’t be considered a single unit; instead, as a system.
Furthermore, dependent upon the financial flexibilities of an MNC, locational choices reflect an ability to continue access to resources with ease, despite raised costs. One hypothesis found that due to a company’s ability to access resources, regardless of location, the greater degree of multinationality, the less likely it would locate within an already existing industry cluster. A second hypothesis, broken up into two possibilities, questioned efficiency towards cross-border transferability within network-resources. Ms. Huang analyzed the issue through understanding enterprises’ ease in access to the showcased hierarchy of difficulty among the three, with knowledge/technology at the top, followed by services and intermediate inputs. Her hypothesis,therefore, questioned whether entry into an existing industry cluster largely impacted R&D multinationality over Services, or vice-versa.
At the conclusion of her talk, Ms. Huang presented what results she found and cited some takeaways. Given the high level of multinationality within a corporation, it can be used to leverage and distribute dispersed resources, which allows for flexibility in location choices and reduced costs that holds the possibility of better economic performance and a competitive advantage over those within industry clusters. She suggests a reconceptualization of MNCs as a system, with multinationality important in determining location. The concept of multinationality depending on resource dimension, with technical knowledge the most fungible resource. Finally, more investment should be placed toward R&D globally, with governments incentivizing MNCs to enter non-cluster regions. Despite limitations in sourcing, the paper presents a promising new angle to existing research.
To induce lively and interactive communication, the whole hour was designed as an open forum allowing people an opportunity to raise their hands and speak up throughout for clarifications on certain elements, or challenging any aspect of the research topic. With a blend of professors and students, the talk was full of back-and-forth debates and comments that allowed her an opportunity to provide clarity on aspects of her paper’s general findings, as well as its limitations she seeks to address in future research. Professors challenged her hypotheses as well as her overall approach to the multinationality evaluation given her hypotheses and overall findings. Ms. Huang clarified her limitation of resources resulting in her primary focus on companies located inside the United States, and how the micro sampling could be used as a basis for a macro level understanding of MNC’s thought processes. Students asked about clarifications over definitions, as well as clarity on how she went about arranging the hierarchy of source inputs companies face, since different companies face different challenges depending on outside influences, such as a nation’s general policies which might impact diplomatic relations and the degree of friendliness shared with the nation where foreign investment is taking place. Ms. Huang acknowledged the variable differences among international businesses, but came to her conclusions based on the data made available to her.
It was our honor to have Der-Ting Huang come and present her findings on the level of multinationality within a corporation and its impact on choice of location in regards to foreign investments. With the talk fully conducted in English, it attracted local and international students and professors that sparked lively discussions. It presented a great opportunity to gain new perspectives on an ever-developing topic. Our center wishes Ms. Huang all the best in her new endeavors as she steps into the teaching profession, and hopes to have her back in the near future to present new research.
