Project description
Can multinationals and their linkages foster development in host economies?
Less developed countries compete to attract multinational corporations (MNCs), often seen as growth engines. Meanwhile, domestic firms, workers and consumers worry that MNCs may offer weak trickle-down benefits while increasing vulnerability to global shocks. This long-standing debate on the trade-offs of MNC-led development remains unresolved. The ERC-funded LINK4DEV project addresses this gap through four interconnected projects. Project 1 examines whether MNCs foster linkages with local firms or operate in silos, increasing inequality, using data from Uganda, Costa Rica, Turkey and Belgium. Project 2 studies whether technology transfers to local suppliers are socially optimal, and estimates aggregate gains and policy levers. Project 3 analyses why MNCs source inputs globally, focusing on centralised decision-making. Project 4 assesses how international trade shocks propagate through MNC-centred production networks.
Objective
Less developed countries compete to attract multinational corporations (MNCs), often seen as growth engines. Meanwhile, domestic firms, workers, and consumers express concerns that MNCs may offer weak trickle-down benefits while increasing their vulnerability to global shocks. This tension is not new: the debate on the trade-offs associated with MNC-led development strategies is long-standing yet unresolved.
LINK4DEV will break new ground in three ways. First, the program will examine the impact of MNCs and their linkages on development through a wide (inside-the-firm) micro to (cross-country) macro lens. Second, it will combine “big data” and causal-inference methods with novel theory. Third, it will partner with governments from four continents, maximizing cross-country learning and impact.
LINK4DEV consists of four interconnected projects. Project 1 will examine whether MNCs foster linkages with local firms or operate in silos, increasing inequality. It will provide a first-time anatomy of MNC linkages in the production networks of four economies at different development stages: Uganda, Costa Rica, Turkey, and Belgium. Project 2 will examine whether technology transfers from MNCs to local suppliers are socially optimal in the same four economies. It will then estimate the associated aggregate economic gains and identify policies to increase them. Project 3 will study why MNCs source a large share of inputs globally, focusing on the role of centralized decision-making in MNCs. Attracting MNCs with global sourcing undermines efforts to promote local linkages. This project will merge detailed transaction records from Costa Rica with global supplier and survey data for MNCs. Project 4 will assess how far-reaching the effects of an international trade shock are and how central MNCs are to these effects. It will leverage a cyberattack on Costa Rica’s customs system and a new economy-wide mapping of all firm-to-firm, firm-to-worker, and firm-to-consumer interactions.
Fields of science (EuroSciVoc)
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: The European Science Vocabulary.
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: The European Science Vocabulary.
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Project’s keywords as indicated by the project coordinator. Not to be confused with the EuroSciVoc taxonomy (Fields of science)
Project’s keywords as indicated by the project coordinator. Not to be confused with the EuroSciVoc taxonomy (Fields of science)
Programme(s)
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
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HORIZON.1.1 - European Research Council (ERC)
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Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
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Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
HORIZON-ERC - HORIZON ERC Grants
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Call for proposal
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Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
(opens in new window) ERC-2025-STG
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WC2A 2AE London
United Kingdom
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