Globalization Impact on Multinational Enterprises

Justine Kyove,Ufuoma Odibo,Giuseppe T Cirella,Katerina Streltsova

doi:10.3390/world2020014

Abstract

The impact of globalization on multinational enterprises was examined from the years 1980 to 2020. A scoping literature review was conducted for a total of 141 articles. Qualitative, quantitative, and mixed typologies were categorized and conclusions were drawn regarding the influence and performance (i.e., positive or negative effects) of globalization. Developed countries show more saturated markets than developing countries that favor developing country multinational enterprises to rely heavily on foreign sales for revenue growth. Developed country multinationals are likely to use more advanced factors of production to create revenue, whereas developing country multinationals are more likely to use less advanced forms. A number of common trends and issues showed corporate social responsibility, emerging markets, political issues, and economic matters as key to global market production. Recommendations signal a strong need for more research that addresses contributive effects in the different economies, starting with the emerging to the developed. Limitations of data availability and inconsistency posed a challenge for this review, yet the use of operationalization, techniques, and analyses from the business literature enabled this study to be an excellent starting point for additional work in the field.

Highlights

Globalization is commonly used to define the connectedness and spread of technology, production, and communication worldwide
Globalization has increased productivity in world economies over a long period of time defined by the relation between productivity, international trade, and foreign direct investment (FDI) [135,164]
Based on historical trends and growth rates, international trade is predicted to grow by approximately 50% in 2021 among multinational enterprises—from developed and developing countries—despite the COVID-19 crisis [165,166,167,168,169,170,171,172]

Summary

Introduction

Globalization is commonly used to define the connectedness and spread of technology, production, and communication worldwide. Based on historical trends and growth rates, international trade has continuously faced challenges due to increased uncertainty in the economy and rising tensions in trade [4]. The globalization era has transformed many multinational enterprises (e.g., Amazon and Alphabet) into highly efficient and productive entities that outweigh small countries and grow in power and control [6]. This has been especially prevalent during the COVID-19 pandemic in which technology-based enterprises have acquired massive profits, power, and control over communication [7,8,9,10,11]. The relationship between globalization factors and enterprise performance in conjunction with potential impacts raises vital concerns in regard to enterprise innovation

Methods

Findings

Discussion

Conclusion