Globalization in the Netherlands

Abstract

The Netherlands has an exceptionally long history when it comes to international activities. As early as 1602 the Dutch East India Company was established to carry out colonial activities in Asia. During the seventeenth and eighteenth centuries, Dutch companies built up a worldwide presence through trading settlements in many countries. Effi cient transportation due to innovations in shipbuilding compensated for the lack of raw materials in the home base. Dutch economic development heavily relied on resources imported from abroad (in particular bulk goods -such as iron ore, grain, furs and wood -from the countries bordering the Baltic Sea, and more luxurious merchandise -such as spices, salt, gold, silver and porcelain from Asia, Africa and America). In what is now known as 'Holland's Golden Age', the Netherlands became one of the most prosperous countries in the world (Goey, 1999).But even after the colonial era ended, the Netherlands continued to be a signifi cant player in the world economy, unlike other historical trading nations such as Spain and Portugal. For instance, signifi cant investments were made in the Russian railway and shipping industries in the nineteenth century. Furthermore, at the end of the nineteenth century and during the early years of the twentieth century, many Dutch companies were established that are still known as large multinationals today, such as Unilever, AKZO, Rabobank, Philips, Shell and Wolters Kluwer. All of them benefi ted from business opportunities abroad that helped them to grow quickly, whether through shareholdings, takeovers, licences or direct investments (van Zanden, 1997). As a result, nowadays Dutch business overseas is no longer restricted to trading as in earlier days, but is also carried out through foreign direct investment (FDI) and more recently through strategic alliances and networks (see, e.g., van Kranenburg et al., 2001). Currently, the Netherlands is the fi fth-largest outward investor in the world (UNCTAD, 2006), an extraordinary position for a small country. Although always a net outward investor, the Netherlands also quickly recognized that incoming FDI could contribute to the economic well-being of the country, since FDI not only involves fi nancial fl ows, but also transfers of materials, components, fi nished products and intangible assets, e.g. in the form of knowledge about production processes, markets, distribution channels, and management and entrepreneurship (Andersson et al., 1996). Furthermore, foreign fi rms can act as growth accelerators for the Dutch economy as they are generally active in sectors that create a lot of indirect employment, resulting in additional growth (Berenschot, 2007). Worldwide, the Netherlands is the sixth-largest recipient of FDI (UNCTAD, 2006). This is an exceptional position for such a small economy as well. More than 7000 foreign affi liates were operating in the Netherlands during the last decade (Hogenbirk, 2002;Hogenbirk and van Kranenburg, 2006).This chapter analyses the characteristics of the Dutch economy...

Feeling the Squeeze: Nonmarket Institutional Pressures and Firm Nonmarket Strategies

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Colocation Patterns of Foreign-Owned Firms in a Small Open Economy: Evidence from the Netherlands

“…Although always a net-outward investor, the Netherlands also quickly recognized that incoming FDI could contribute to the economic well-being of the country, since FDI not only involves financial flows, but also transfers of materials, components, finished products and intangible assets (Hogenbirk et al, 2009). Worldwide, the Netherlands is the sixth largest recipient of FDI (UNCTAD, 2006).…”

“…Many small economies are nowadays members of trading blocks; this membership increases their location attractiveness as they become free gateways to a larger economic entity or market. As a result, the number of foreign firms has significantly increased in many small open economies (Hogenbirk et al, 2009). Therefore, the aim of this study is to examine the colocation patterns exhibited by foreign-owned firms with different firm characteristics in a small open economy which is part of a larger economic entity.…”

Nonmarket strategies predictors for foreign firms

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