Nagesh Kumar
Published by Sage Publications, New Delhi/Thousand Oaks/London, 1994
ISBN 0-8039-9183-5, 203 pages

Abstract
Multinational enterprises (MNEs) play an important role in the economic activity of most developing countries, including India. The inter-industry pattern of their participation in a country is, however, expected to be uneven depending upon the ownership of intangible assets and internalisation incentives. Furthermore, because of their ownership advantages, centralised decision-making, and global outlook, MNE affiliates adopt different competitive strategies from their host country firms which may have a bearing on their performance. Within this broad framework this book analyses the industrial distribution, distinguishing characteristics, and relative performance of MNEs in Indian manufacturing.
The book begins with a succinct account of the evolution of the Indian government's policy towards foreign collaborations and a discussion of the governmental role in shaping the pattern of foreign direct investments (FDIs) in the country. This is followed by a rigorous examination of the extent to which the postulates of contemporary theory and policy factors explain the inter-industry variation in foreign shares, computed for the first time for India using unpublished sources, as well as the significance of licensing agreements. Then the book systematically analyses the distinctive characteristics of MNE affiliates and local firms in terms of 15 different aspects of firm conduct and performance using uni- and multivariate techniques. It contends that MNE affiliates and local firms constitute different 'strategic groups' in Indian industries and finds empirical support for the hypothesis that the superior profitability of MNEs is due in part to the protection enjoyed by them from intergroup mobility barriers. It also assesses the role of MNEs in promoting India's manufactured exports, comments on new policies, makes a case for a more focused approach to attracting export-oriented FDIs and outlines elements of such a strategy.

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