Techological capability building in MNE-related social businesses of less developed countries: The experience of Grameen-Danone Foods in Bangladesh

Jahan A. Peerally & Paulo N. Figueiredo


Although there has been considerable research on firm-level technological capability building in the context of developing economies, there is a scarcity of studies which examine this issue in multinational enterprises' socially motivated businesses located in less developed economies. This paper examines the latterissue on the basis of first-hand empirical evidence derived from an extensive field research on Grameen-Danone Foods Limited (GDFL) in Bangladesh. The study found that GDFL generated relevant spillovers to the host economy by accumulating production capabilities in association with innovation capabilities at intermediate levels across four technological functions: project management, process and production organization, product centred and equipment-related. Apart from revealing the types of frugal and reverse innovations which emanates from such a business, our study also explores - unlike existing studies which only focus on the financial and social benefits - the technological benefits generated froma social business model.Understanding the nature and dynamics of technological activities in social businesses of less developed economies is relevant for the achievement of enhanced local, autonomous and sustainable economic and social development.

Kewords: Technological capability building, MNE subsidiaries; social businesses, entrepreneurship; bottom of the pyramid; less developed countries; Bangladesh.

JEL classification: M16, O32, Q16, Q18

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