Multinational Enterprises in the Global Economy

Abstract

The international trade and investment linkages that have evolved since World War II have been importantly influenced by, and have in turn greatly influenced, the growth of multinational enterprises (MNEs). We use the term enterprise rather than any more restrictive term, such as corporation, to refer to organizations engaged in business activities such as production, service, and sales, regardless of their legal form or type of ownership. In particular, both investor-owned entities and state-owned entities are included, along with various hybrid combinations. The appearance and growth of hybrids-both private-government partnerships and multinational joint ventures and strategic alliances—is a particularly significant feature of the contemporary international business environment. We follow Dunning in defining a multinational enterprise as one that “owns and controls income-generating assets in more than one country” (Dunning, ed., 1974, p. 13), or more recently as “a coordinator of value added in two or more countries” (Dunning, 1991, p. 3; see also Dunning, 1979). More elaborate terminological distinctions among such enterprises, such as those suggested by Porter (1986, 1990), Bartlett and Ghoshal (1989), and others (see Hoogvelt, 1987, for a comprehensive compilation) are useful for some purposes, and are introduced as relevant below.