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International Business and Democracy

Richard Youngs

in International Democracy and the West: The Roles of Governments, Civil Society, and Multinational Business

This chapter examines the evolving positions and actions of multinational corporations in relation to democratic norms. The focus on core rights issues under the Corporate Social Responsibility ... More

This chapter examines the evolving positions and actions of multinational corporations in relation to democratic norms. The focus on core rights issues under the Corporate Social Responsibility agenda was stronger than concerns over democratic trends. Many companies prioritised the autocratic stability and autonomy of elite policymaking structure from civil society pressure, and new investments were not linked to improvements in political freedom.Less

Introduction: Multinational Corporations as Lead Agents of Globalization?

Peer Hull Kristensen and Jonathan Zeitlin

in Local Players in Global Games: The Strategic Constitution of a Multinational Corporation

This introductory chapter begins with a discussion of two major developments during the end of the 20th century: the growth of industrial districts or regional clusters of smaller firms in many ... More

This introductory chapter begins with a discussion of two major developments during the end of the 20th century: the growth of industrial districts or regional clusters of smaller firms in many market segments and expanded global reach of large multinational corporations (MNCs). The construction of MNCs in the current globalization debate is then assessed. The three main parts of this book is described.Less

Associating Local Strategies of Global Reach: Horsens, Lake Mills, Eastbourne, and APV

Peer Hull Kristensen and Jonathan Zeitlin

in Local Players in Global Games: The Strategic Constitution of a Multinational Corporation

This chapter tells the story of the growth of the MNC using the example of four distinct firms, which after struggling for survival as more or less independent entities for over a century, came ... More

This chapter tells the story of the growth of the MNC using the example of four distinct firms, which after struggling for survival as more or less independent entities for over a century, came together in the 1970s and 1980s to form a single MNC. These independent firms each entered into the MNC for their own reasons, seeing this as the preferred alternative among several possibilities. In two out of three cases, the firms in question were already pursuing a multinational strategy of their own, whether individually or as part of a larger group. Since these efforts had failed or were about to, with their prospects looking bleak, each firm opted instead to become part of APV. But as their separate histories reveal, it was by no means predetermined that APV would become the firm that constituted the MNC headquarters and thereby end up seeing itself as acquiring the right to manage the others.Less

From the NIEO to the International Investment Law Regime: The Rise of the Multinational Corporation as a Subject of Regulatory Concern in International Law

Doreen Lustig

in Veiled Power: International Law and the Private Corporation 1886-1981

Chapter 7 traces a ‘road not taken’ in the history of regulating global corporations in pursuit of economic democracy, the conditions that led to its failure, and the emergence of the contemporary ... More

Chapter 7 traces a ‘road not taken’ in the history of regulating global corporations in pursuit of economic democracy, the conditions that led to its failure, and the emergence of the contemporary regime that separates market and politics. The late 1960s saw a rare moment of unity in the struggle over the regulation of corporations among decolonized nations, which together formed the New International Economic Order and civil society of the Global North in a bid to defy unruly corporations. While North–South opposition to corporate power gained traction, the tensions between capital-exporting countries were augmented. These conditions opened a window of opportunity for a new international policy regime to regulate global corporations. But this window would not remain open for long. In the aftermath of the Barcelona Traction Case (1970), capital-exporting countries sought an alternative legal framework of a new regime of international investment law and redefined the normative content of corporate responsibility in human rights terms.Less

Primary Rules?

Elisa Morgera

in Corporate Accountability in International Environmental Law

This chapter argues that in the absence of international environmental obligations binding upon multinational corporations, the emergence of legal standards will allow adapting and translating ... More

This chapter argues that in the absence of international environmental obligations binding upon multinational corporations, the emergence of legal standards will allow adapting and translating inter-State obligations embodied in international environmental law into specific international criteria to determine the legitimacy of the conduct of the private sector against internationally recognized values and rules. The notion of legal standards is theoretically discussed, in order to provide the most appropriate framework to analyse the normative phenomena related to corporate environmental accountability at the international level.Less

International Trade Union Revitalization: The Role of National Union Approaches

Nathan Lillie and Miguel Martínez Lucio

in Varieties of Unionism: Strategies for Union Revitalization in a Globalizing Economy

The increasing globalization of the economy and the continued expansion of multinational corporations have triggered a variety of forms of union action across national frontiers. The chapter examines ... More

The increasing globalization of the economy and the continued expansion of multinational corporations have triggered a variety of forms of union action across national frontiers. The chapter examines several forms of internationalism, including campaigns around strike solidarity, collective bargaining initiatives, and cross-border organizing drives. The chapter presents both survey data and case studies to illustrate these different forms and assesses their contribution to union revitalization.Less

Introduction: A Plea for Global Justice

in Multinational Corporations and Global Justice: Human Rights Obligations of a Quasi-Governmental Institution

Globalization is a paradox: it is supposed to bring people closer together, yet its individualistic and competitive stance has driven them apart; it produces lavish and excessive wealth but also ... More

Globalization is a paradox: it is supposed to bring people closer together, yet its individualistic and competitive stance has driven them apart; it produces lavish and excessive wealth but also gives rise to extreme poverty, starvation, and inequality. This book argues that multinational corporations (MNCs) are agents of global justice. It offers an inquiry into the foundations of rights-based global justice, analyzes MNCs' quasi-governmental roles, and examines their obligations of (global) justice. In order to complete the conceptual foundations of the theory of the quasi-governmental institution, the book considers the systematic relationship between the concepts of power and authority. It then discusses the main normative assumptions behind three distinct current approaches to interpreting corporate responsibilities: the neoclassical business model, conventional concepts of corporate social responsibility and corporate citizenship, and the current debate on business and human rights. It concludes by presenting a holistic framework or taxonomy of obligations of justice for the quasi-governmental institution and assessing the implications of such an approach for the quest for global democracy.Less

Introduction

Federico Varese

in Mafias on the Move: How Organized Crime Conquers New Territories

This introductory chapter provides an overview of the book's key themes. The book examines mafias' ability to transplant in new and distant territories. Conventional wisdom suggests that organized ... More

This introductory chapter provides an overview of the book's key themes. The book examines mafias' ability to transplant in new and distant territories. Conventional wisdom suggests that organized crime migrates easily due to the spread of globalization and population migration, and criminal multinational corporations are increasingly unattached to a specific territory. According to Louise Shelley, the director of the Transnational Crime Institute in Washington, DC, “international organized crime has globalized its activities for the same reasons as legitimate multinational corporations.” Many authors argue that the notions of territorial entrenchment and control are becoming obsolete for a “Global Crime Inc.” that “transcends the sovereignty that organizes the modern state system.” The “transnational organized crime consensus” is influential among policymakers.Less

Multinational Cost of Capital and Capital Structure

FRANCK BANCEL, USHA R. MITTOO, and ZHOU ZHANG

in International Finance: A Survey

Financial theory predicts that multinational corporations (MNCs) should have a lower cost of capital and a higher leverage level compared to domestic corporations (DCs) because of their enhanced ... More

Financial theory predicts that multinational corporations (MNCs) should have a lower cost of capital and a higher leverage level compared to domestic corporations (DCs) because of their enhanced access to global capital markets and risk diversification across countries. Empirical evidence, however, shows that the answer depends on the MNCs' home and host country factors, such as capital market development, institutional environment, and political stability. While the prediction holds for MNCs based in emerging markets, the opposite is observed for U.S. MNCs that expand into less stable economies. The increased globalization of the product and capital markets in the 1990s has also narrowed the gap in cost of capital between MNCs and DCs and this trend is likely to continue in the future.Less

Conclusion: Post-socialist management in CEE and the international economy

Roderick Martin

in Transforming Management in Central and Eastern Europe

This concluding chapter discusses two issues. The first is the type of enterprise structure emerging in CEE, compared with other current forms of capitalist economic organization. The second issue is ... More

This concluding chapter discusses two issues. The first is the type of enterprise structure emerging in CEE, compared with other current forms of capitalist economic organization. The second issue is the role of international influences upon future trends in management in the region, most importantly the role of multinational corporations and the significance of the European Union. CEE has been incorporated into the international trading system, but remains on the periphery of global capitalism.Less

National Policies to Attract Foreign Direct Investment in Research and Development: An Assessment of Brazil and Selected Countries

Mariana Zanatta, Eduardo Strachman, Flávia Carvalho, Pollyana C. Varrichio, Edilaine Camillo, and Mariana Barra

in Southern Engines of Global Growth

This chapter examines the main policies employed to attract multinational corporation (MNC) technological activities in China, India, Ireland, Israel, Singapore, and Taiwan in order to analyse the ... More

This chapter examines the main policies employed to attract multinational corporation (MNC) technological activities in China, India, Ireland, Israel, Singapore, and Taiwan in order to analyse the case of Brazil. Foreign direct investment (FDI) attraction policies are part of industrial and development policies and should not be assessed or used in isolation. The methodology applied in this work consists of elaborating country reports which comprised: (i) economic and technological data; (ii) science, technology, and industry (S&T&I) policies; (iii) the development of key technological activities by MNCs; and (iv) the main MNC R&D activities developed in the country. For most countries the selectivity, continuity, and coordination of national policies are the key factors in creating a favourable environment for foreign R&D activities. In Brazil, despite some recent actions to foster innovation and R&D investments—such as the Innovation Law—it is patent that there is a lack of a strong government policy and an absence of a specific governmental structure targeted to the attraction of such investments.Less

Globalization without Integration: International Considerations

Kathryn C. Lavelle

in The Politics of Equity Finance in Emerging Markets

The chapter explores both the role of international organizations in promoting equity market finance and the circumstances of the international market for equities, which make a local market ... More

The chapter explores both the role of international organizations in promoting equity market finance and the circumstances of the international market for equities, which make a local market necessary. It pays particular attention to the role of the International Finance Corporation (a part of the World Bank Group) in fostering convergence in the market for transnational equities. This market is really only available to large, multinational firms and sophisticated institutional investors. Hence, national or local markets become necessary for the creation of certain securities, particularly those associated with privatization programs.Less

Singapore: Destination for Multinationals

Chia Siow Yue

in Regions, Globalization, and the Knowledge-Based Economy

Singapore has made the region and the world its economic hinterland and is a favoured destination for multinational corporations. This chapter addresses three main issues: Singapore as a ... More

Singapore has made the region and the world its economic hinterland and is a favoured destination for multinational corporations. This chapter addresses three main issues: Singapore as a manufacturing base and services hub; the role of foreign direct investment (FDI) and multinational corporations (MNCs [or multinational enterprises, MNEs]) in Singapore's economic development; and regionalization and the Indonesia–Malaysia–Singapore (IMS) growth triangle. It is concluded that the crucial feature in Singapore's success has been to plug into the global and regional economies to gain access to resources for consumption and production, and markets for its goods and services, and to secure the assistance of foreign MNCs.Less

Contracts and Investment in Natural Resources

William Hogan, Federico Sturzenegger, and Laurence Tai

in The Natural Resources Trap: Private Investment without Public Commitment

The objective of this book is not to discuss whether natural resources turn out to be good or bad, but rather to address a related issue: the problem that countries face in setting up a credible and ... More

The objective of this book is not to discuss whether natural resources turn out to be good or bad, but rather to address a related issue: the problem that countries face in setting up a credible and stable regime for private investment to exploit these resources. Even if governments have the capacity to develop the resources on their own, many lack the technical knowledge to do so or the large sums of capital required to undertake the investments. For these reasons, countries may rely on multinational corporations (MNCs) to discover and develop these resources. In doing so, they become a host country (HC) to a foreign firm, and the assistance of a second party introduces an attendant conflict of interest. A central and persistent problem here is the limit on the enforceability for contracts with a sovereign government, unlike contracts between private parties.Less

The Global Cigarette

Howard Cox

in The Global Cigarette: Origins and Evolution of British American Tobacco, 1880-1945

This chapter sums up the key findings of this study concerning the origin and evolution of BAT Co. as a global cigarette company. This study ... More

This chapter sums up the key findings of this study concerning the origin and evolution of BAT Co. as a global cigarette company. This study provides an opportunity to explore the evolution of a pioneering multinational corporation and to assess the strengths and weaknesses of the international management system it created. It is particularly enlightening because the cigarette industry is one the first lines of business where manufacturing companies attempted to expand their foreign sales by means of a transfer of production and management technology to the target market.Less

Birth of a Multinational Enterprise

Howard Cox

in The Global Cigarette: Origins and Evolution of British American Tobacco, 1880-1945

This chapter discusses the growth of BAT Co. as a multinational cigarette company. In 1902, James Duke and other BAT Co. directors consolidated ... More

This chapter discusses the growth of BAT Co. as a multinational cigarette company. In 1902, James Duke and other BAT Co. directors consolidated the company's assets and integrated them into a coherent corporate structure. They established an export business, based on factories in America and Britain, and used a number of foreign-based affiliates to handle the company's key foreign investments. In addition, BAT Co. incorporated two leaf-purchasing subsidiaries in the U.S. to provide the primary raw material. Despite being a multinational corporation, BAT Co. remained a joint venture fully owned by ATC and Imperial Tobacco Co.Less

The Adventures of Mickey Mouse, Big Mac, and Coke in the Land of the Gauls

Richard F. Kuisel

in The French Way: How France Embraced and Rejected American Values and Power

This chapter focuses on major American business enterprises in France. It addresses three issues. First, did Coca-Cola and the others directly export their products, techniques, and strategies to ... More

This chapter focuses on major American business enterprises in France. It addresses three issues. First, did Coca-Cola and the others directly export their products, techniques, and strategies to France, or did they modify their ways to suit the locals? Did they impose or adapt? A second issue is an assessment of the impact of these American multinationals: What kind of reception did they get from French consumers, and what effects did they have on their French competitors? These questions lead toward a third and more general issue—the importance of culture and identity in determining French reaction. Were the perils of these outsiders caused by American managers' misunderstanding or disregard of French values, traditions, and sense of identity? Did culture hamper American business or did it prove so supple that it was of little consequence?Less

The Contribution of Multinational Corporations to U.S. Productivity Growth, 1977–2000

Carol Corrado, Paul Lengermann, and Larry Slifman

in International Trade in Services and Intangibles in the Era of Globalization

This chapter examines the contribution of multinational corporations (MNC) to the aggregate productivity record of the U.S. for the period from 1977 to 2000. The findings indicate that MNC parents or ... More

This chapter examines the contribution of multinational corporations (MNC) to the aggregate productivity record of the U.S. for the period from 1977 to 2000. The findings indicate that MNC parents or affiliates based in the U.S. play a major role in productivity improvement. It explains that while the MNC sector only accounts for about 25 percent of the gross product of all nonfarm private businesses and about 40 percent of nonfinancial corporate gross product, it accounted for more than half of the increase for all nonfarm private businesses and all of the increase in the labor productivity of nonfinancial corporations in the late 1990s.Less