Concepts
Who introduced the concept of linkages in 1958?
Albert Hirschman
What are the two main types of vertical linkages?
Backward and Forward Linkages.
What is one economic benefit of linkages?
Inclusive economic growth.
Name one challenge of backward linkages.
Limited local capacity.
Why do governments get involved in linkages?
To bridge gaps between foreign investors and local firms.
What are linkages in international business mainly about?
Connections among firms and institutions facilitating goods, services, knowledge, and technology flow.
Define backward linkages.
When foreign affiliates purchase goods/services from domestic firms.
How do linkages enhance competitiveness?
By promoting technology transfer and cost reduction.
What challenge can arise from horizontal linkages?
Intellectual property concerns.
What does TRIMS stand for?
Trade-Related Investment Measures.
Name two outcomes of strong linkage systems.
Industrial upgrading and economic transformation.
Define forward linkages.
When foreign affiliates sell products/services to local firms for distribution
What benefit is associated with market stability?
Improved market access and diversification.
Give one reason foreign firms may hesitate to link with local businesses.
Poor quality control or unreliable delivery.
Why did the WTO prohibit forced linkages?
They restricted fair competition and international trade.
List the five core components of linkages.
Actors, Flows, Institutions, Learning Mechanisms, Governance Structures.
Give one example of horizontal linkage in the Caribbean.
Digicel and Cable & Wireless (Flow) collaborating with local ICT firms.
How do linkages help human capital development?
Through skills training and knowledge sharing.
What does “unequal bargaining power” mean in linkages?
Foreign firms dominate decisions and profits.
What approach do modern governments use to encourage linkages?
Market-based approach using incentives and cooperation.
Explain how linkages contribute to development.
By enabling the exchange of technology, skills, and capital that improve competitiveness and growth.
What differentiates vertical and horizontal linkages?
Vertical = supply chain connection; Horizontal = collaboration in same industry.
Name three benefits of linkages to developing countries.
Employment generation, productivity improvement, and access to finance.
List three major challenges that impact linkage promotion.
Uncompetitive pricing, lack of quality, and long-term commitment issues.
Name two recommendations for policymakers to strengthen linkages.
Promote technology transfer and strengthen institutional frameworks.