The Canadian Enterprise of W.H. Smith: An Analysis of Government Policy on International Operations

Abstract

Bargaining models have been the primary analytical lens for examining Host Country Government (HCG) – Multinational Enterprise (MNE) relations. Bargaining models, however, provide only a limited explanation for the rich interaction between HCGs and MNEs. To better capture the complexity and nuance of firm-state interaction, this research integrates insights from New Institutional Economics into bargaining models. To illustrate the insights possible with this approach, I analyse archival data related to the operations of the British retailer W.H. Smith in Canada. The findings demonstrate how an HCG can protect a nation’s sovereignty, while simultaneously being open to foreign direct investment, and the adverse effect this may have on MNEs.