ABSTRACT
This paper explores the major developments in the multinational enterprise (MNE) literature; along with the research conducted on Scottish-based MNE subsidiaries and the policy changes that have taken place in Scotland aimed at promoting foreign direct investment (FDI). It is suggested that subsidiaries may evolve from the branch plant to the developmental and the entrepreneurial subsidiary type; with each of these three subsidiary types contributing differently to the economic development of the host country. The empirical evidence from an in-depth analysis of IBM, Greenock, Scotland attests to the importance of the entrepreneurial subsidiary activities for the host economy. Implications for research and public policy are discussed.
