Maersk’s Role in Economic Development: A Study of Shipping and Logistics Foreign Direct Investment in Global Trade

Majbritt Greve

Research output: Book/ReportPhD thesis

1091 Downloads (Pure)

Abstract

This dissertation sets out to investigate how shipping and logistics foreign direct investment (FDI) impacts trade and economic development in host developing countries. It specifically assesses how the introduction of advanced shipping and logistics services by a foreign investor occurs and the potential effects on host country export performance. Overall, this PhD thesis contributes to deepening and nuancing our understanding of how and why trade effects from shipping and logistics FDI occur and under which circumstances they occur.
The dissertation is based on an in-depth single-firm case study of the world’s largest shipping company, Maersk, sampling two embedded time-series and longitudinal sub-studies of Maersk in China from 2004-2012 and in Vietnam from 2003-2015. The two studies of Maersk in China and Vietnam are based on a mixed-methods approach of qualitative case study and econometric modeling, which provides for a complementary, nuanced and robust analysis of Maersk. Maersk is unique in its market-leading role. It is one of the most global and most vertically integrated shipping companies that therefore holds a central position in influencing global trade. Hence, Maersk makes a unique and relevant case for analyzing how shipping and logistics FDI may impact export performance in developing countries.
The PhD consists of four individual papers and an overarching chapter that outlines the overall study. The four papers consist of two empirical studies of Maersk, a literature review, and a review of methods to measure multinational companies’ development effects.
Chapter Two is a literature review of three primary bodies of literature on the topic (international trade, global value chains, and international business). The chapter identifies the literature's contributions and knowledge gaps to the topic. By combining elements from the three bodies of literature, it develops a holistic analytical framework that seeks to fill the knowledge gaps of the literature and advance theory further. The analytical framework proposes that shipping and logistics FDI generates value and influences trade through at least five different value dynamics that are shaped and confined in the dynamic interaction between the characteristics of the multinational corporation and the host country. The framework contributes to theory in its holistic approach that provides for a more nuanced understanding of the topic. Moreover, by assessing contextual conditions, the framework embraces the inherent complexity and heterogeneity of FDI research and contributes to a valid understanding of FDI effects. Chapter Three is an empirical study of Maersk in China based on time series and econometric methods. It explores the statistical significance of liner shipping connectivity and logistics performance in explaining trade costs and trade growth in China from 2004-2012. Subsequently, it establishes Maersk’s contributions. It concludes that liner shipping connectivity and logistics performance are some of the most significant elements in explaining China’s trade costs and trade growth, and highlights Maersk’s significant contributions to these elements. The chapter contributes to the literature by providing country and firm-level empirical insights and statistically measuring the effects of Maersk. Chapter Four is a study of Maersk in Vietnam based on longitudinal qualitative case study research methods. It explores the different value dynamics through which Maersk impacts export performance in Vietnam, and assesses how firm and location specificities generate and shape such value dynamics and trade effects. The study contributes to the literature by providing rich empirical insights into Maersk’s strategies and effects in the context of Vietnam’s export-led industrialization, and by linking Maersk’s ownership-specific advantages to trade effects. Chapter Five is a methodological study that reviews multinational corporations’ practices in measuring, documenting, and communicating their social and economic contributions to host developing countries (i.e., corporate impact assessments). The chapter identifies six central challenges and key avenues for multinational companies to improve corporate impact assessment practices going forward to better contribute to the business and society.
This PhD yields several contributions. First, this PhD contributes to the literature by assessing and nuancing our understanding of a sector that is little advanced across mainstream economics literature. Second, this thesis contributes to theory by putting forward an analytical framework that, by combining elements from three central bodies of literature, and by testing the framework with empirical data, arrives at a holistic frame from which to fill the literature’s knowledge gaps and further advance theory to the topic. Third, this thesis contributes to the literature by analyzing the firm level and addressing firm heterogeneity. It does so by opening up the ‘black box‘ of the firm and linking the ownership-specific advantages of Maersk to host country trade effects. Fourth, this thesis complements econometric modeling methods with a single firm case study methodology. It thereby contributes to an in-depth, empirically rich, context-dependent, and embedded analysis that embraces the complexity and dynamic features of FDI research. A fifth contribution concerns the thesis’ focus on disentangling the underlying firm value dynamics and ways through which Maersk influences trade to better understand how they work, under which circumstances, and with what consequences. Finally, this thesis contributes to managerial practices by advancing our understanding of how multinational companies best measure and document their socio-economic impacts in host developing countries and, subsequently, how they extract the most value from such impact assessments for the business and society. The thesis can also assist policymakers by suggesting that part of the trade isolation of some developing countries is due to policy factors related to shipping and logistics infrastructure that are within their span of control. In sum, this thesis contributes to theory and practice by emphasizing the extraordinary role of the container shipping and logistics sector in global trade—a role that deserves much more attention and appreciation from both academia and practice going forward.
Original languageEnglish
Place of PublicationFrederiksberg
PublisherCopenhagen Business School [Phd]
Number of pages302
ISBN (Print)9788775680856
ISBN (Electronic)9788775680863
Publication statusPublished - 2022
SeriesPhD Series
Number16.2022
ISSN0906-6934

Cite this