Activities Of Transnational Corporations Research Articles

Sovereignty under Siege? Globalization and New Zealand (review)

Reviewed by: Sovereignty under Siege? Globalization and New Zealand Roderic Alley Sovereignty under Siege? Globalization and New Zealand, edited by Robert Patman and Chris Rudd. Aldershot, UK: Ashgate, 2005. ISBN 0-7546-3064-1; ix + 247 pages, table, figures, notes, bibliographies, index. Cloth, US$99.95. In their introduction, and following an identification of the properties of globalization, this collection's editors treat the phenomenon as terrain where some view the erosion and shrinkage of state sovereignty as irrevocable; where others are convinced that the "Westphalian temple" (the international system of sovereign states) is largely intact; and where a smaller, though important contingent look to globalization as a transformational process shaped by the perceptions, interpretations, and responses of its diverse actors. However, the editors claim, facing all is a key question about the actual nature of the sovereignty and globalization relationship. The challenge is pertinent given that New Zealand, as focus for this collection, joins other small, well-developed, and sovereign-sensitive states such as Singapore, Switzerland, and Finland for inclusion among the ten most globalized of states, societies, and economies. Part One, "Political and Economic [End Page 447] Engagement," comprises four chapters assessing globalization as a shift from Keynes to neoliberalism (Roper); New Zealand and the world economy (Richardson); globalization, sovereignty, human rights, and New Zealand (Roth); and globalization and Parliament (Wood). Read as a set, these papers offer ample background about New Zealand's 1980s "big bang" into privatization, deregulation, and liberalization of an economy formerly so shackled as to see late Prime Minister David Lange once term it a "Polish shipyard." However, more was needed here about the impacts of capital mobility, exchange rate movements, and financial market integration on the New Zealand economy. Deserving debate was a point raised by the editors in their conclusion, suggesting that New Zealand has responded to globalization as yetanother international constraint requiring navigation. Largely unaddressed is the debate over public goods versus rational self-interest thatglobalization has stoked in New Zealand, seen, for example, in serious divisions regarding the Kyoto Protocol's local implementation requirements. Part Two, "National Identity," comprises four chapters dealing with Päkehä identity (Spoonley); the implications of globalization for indigenous communities (Henare); migration and New Zealand (Bedford); and republicanism and the Treaty of Waitangi (Hayward). Spoonley sees transnational and global forces moving New Zealand's predominant cultural Päkehä identity beyond its previously negative, unsettled non-Mäori status into something more confident as an asserted participation in cultural partnerships. In his contribution, Henare identifies values traditionally viewed by Mäori as complementary, sustainable, holistic, and constituting what he terms a "matrix of ethical pluralism" (121). Yet his listing's omission of entrepreneurship is puzzling, particularly given the agility with which Mäori have exploited globalization's opportunities. Unmentioned is the remarkable record of the South Island's Ngai Tahu tribe, led by that local scion of tribal capitalism, Sir Tipene O'Regan, and delivering substantial material returns through transnational corporate activities in fishing, venture tourism, and land development. Bedford's thorough, well-documented paper on migration into New Zealand traces significant moves, begun under a points system designed in the 1980s, to attract high-quality human capital capable of contributing to wealth and job creation within what is now one of the most open economies in the world. Although a now more diverse multicultural society, the county's unsettled debate about immigration remains subject toelectoral politicization. Hayward questions New Zealand's discontinuance of legal appeals to the United Kingdom Privy Council on grounds that this has weakened traditional Mäori linkages to the Crown. She further believes that republicanism in New Zealand, a steadily growing sentiment, will not strengthen national identity once the implications of removing former colonial links are considered, but without indicating thenature of such implications. The final section, "Security and [End Page 448] Foreign Policy Directions," includes three papers on New Zealand's regional orientation (Macdonald); multilateralism (Jackson); and New Zealand's relations with the United States (McCormick). Macdonald's survey will assist the uninformed, but needs corrections (the Southeast-Asia Treaty Organization was formed in 1954; the South Pacific Nuclear Weapons Free Zone has been ratified by the nuclear...

Networks, Scale, and Transnational Corporations: The Case of the South Korean Seed Industry

In light of recent theoretical scholarship that has incorporated scale with networks perspectives, this article examines the potential of a scalar networks-based approach to understanding the global strategies and activities of transnational corporations (TNCs), through a comparative case study of two TNCs that were involved in the recent transformation of the South Korean seed industry. The comparative study demonstrates that a foreign TNC’s mergers and acquisitions (M&;As) of major South Korean seed companies in 1998–1999 in the context of structural adjustment (TNC’s material politics of scale) was an outcome of complex relations and the intermingling of various actor-networks that were embedded in various scales. A domestic TNC’s responses to the M&As, on the other hand, illustrate how the TNC’s struggle to reshape power relations through a discursive politics of scale enabled it to extend and enrich its networks and power relations with farmers, politicians, the general public, and the government. Material and discursive uses of scale in the business strategies of TNCs are shaped by complex actor-networks that are embedded in specific sociocultural and institutional contexts and influence new configurations of networks and power relations, and a scalar networks-based approach helps one understand this complexity of TNCs’ activities.

The Conundrum of Corporate Social Responsibility: Reflections on the Changing Nature of Firms and States

The Trail Smelter Arbitrations of 1938 and 1941 still figure as landmark cases in International Environmental law, despite the fact that the debate continues what lessons ought best to be drawn from these proceedings. In the context of contemporary work in the area of transnational corporate activity, wrongful corporate behaviour such as environmental harm or human rights abuses, Trail Smelter can serve as a starting point for the study of effective regulation of trans-territorialized conduct of private actors. The paper highlights the challenges faced by both the persisting attempts to sue multinational corporations before domestic courts and those hoping for efficient outcomes resulting from corporate self-regulation, predominantly under the heading of corporate social responsibility (CSR). The paper places both discussions against the background of an emerging transnational law of corporate regulation, which is characterized by a mixture of domestic and international, public and private regulatory instruments. It is against this background that the lessons from Trail Smelter for the regulation of corporate conduct must be drawn with respect to the transformation of state regulation and the increasing reliance on private self-regulation.

Polskie firmy na tle zagranicznych korporacji w dobie globalizacji

This article presents the role and the importance of Polish Transnational Corporations (TC) to global economy. Dynamic development of TC can be observed since the beginning of 70s of the 20thcentury. Nowadays TC have huge economic power which generates large profits. Many times incomes of TC are bigger than the value of GDP of less developed countries. Activity of TC is very controversial. On the one hand, present TC should be treated as an answer to qualitative changes which have taken place mainly in the sphere of telecommunication and means of transport, on the other hand, they are the motive power of these changes.Polish corporations are very small in comparison with the foreign ones. We have noticed a great disproportion of worth in comparison with corporations which are on the list of the global 1000 or 2000 biggest-worth corporations on the rising market. If Polish corporations want to catch up with the foreign ones, they must considerably increase the speed of their development.

Organizational space: a new frontier in international business strategy?

Purpose – Through an intervention from a geographical perspective on organizational space, this article aims to offer a new horizon in understanding international business strategy.Design/methodology/approach – Starts with two interrelated questions: does space exist in organizations and how does an organization manipulate and produce this organizational space in order to gain competitive advantage? By tackling these questions in the context of international business activities, this paper engages existing (international) management theories.Findings – This article critically reviews the narrow focus of most international business theories on physical location and distance as a significant determinant of foreign direct investment and diverse activities of transnational corporations (TNCs). Quantitative empirical studies in this genre tend to emphasize physical space as a mere “container” of different locations of TNC activities and to measure the distance between these locations as an independent variable...

Global Corporate Citizenship: What Does it Mean?

This article investigates the relationship between corporate social responsibility and a phrase that is fast becoming a preferred description of much the same thing but now set in an international context, namely global corporate citizenship. It is argued that the distinction between these two has not been clearly enough made in the literature. In clarifying the difference, the political nature of the idea of citizenship is focused upon and the politics of introducing triple-line considerations into the activity of transnational corporations is explored. An engagement with a wide range of civil society actors by corporations to further the ‘ethical’ agenda, a reconsideration of ‘corporate democracy’ in an international context, and the idea of a ‘progressive capitalist’ group of companies that might spear-head genuine corporate citizenship are concentrated upon in this assessment. Finally, the politics of an alliance for global corporate citizenship is broached that would take companies well beyond the limited agenda of just noting and attending to their social and environmental responsibilities.

Perspective: Big Oil, Rural Poverty, and Environmental Degradation in the Niger Delta Region of Nigeria

The Niger Delta region of Nigeria is richly endowed with both renewable and non-renewable natural resources. It contains 20 billion of Africa's proven 66 billion barrels of oil reserves and more than 3 trillion cubic meters of gas reserves. Oil and gas resources of the Niger Delta account for over 85% of the nation's gross domestic product (GDP), over 95% of the national budget, and over 80% of the nation's wealth. Paradoxically, the Niger Delta remains the poorest region, due largely to the ecologically unfriendly exploitation of oil and gas and state policies that expropriate the indigenous peoples of the Niger Delta of their rights to these natural resources. The ecological devastation occasioned by the activities of oil transnational corporations (TNCs) have rendered farming and fishing useless, previously the main occupations of these rural people. The people of the Niger Delta are deprived of their share of the wealth on which the entire nation depends; they "benefit" only from compensation for incidents of oil pollution. At the same time, occurrences of oil spills in the Niger Delta region have increased. In this article, it is argued that the ecologically unfriendly activities of oil TNCs, and the state's petroleum development policies, lead to poverty in the Niger Delta, and poverty in turn leads to environmental degradation. It is the dynamics of this interconnectedness that we wish to explore.

Transnational Corporations

In terms of the New World Order, the largest Transnational Corporations (TNCs) are central players. They influence the policies of governments worldwide; they help to order the agenda of the World Trade Organization. They influence the destinies of individual economies in the developing world, they have a crucial impact on the eco-system, they set wage-levels, which can cause the first world to bend to their demands, and so on. Any constitutional architect who does not attempt to set a framework of accountability and global citizenship for the TNCs would demean their craft. How do we orchestrate the healthy influence of TNCs in terms of economic growth and opportunity with the necessity of their conforming to the underlying values of the world community? Can we legislate for corporate responsibility and if so, how? If not, what alternatives are available? This article will explore the values and mechanisms for ensuring that the corporate world is in tune with the expectations of cosmopolitan democracy. How much can be done by national governments, how much can be done by regional groupings such as the EU, how much can be done by bodies such as the OECD, what is the influence of global trade unions, can codes of practice be influential and if so, who are the most promising prime movers? Can procurement policies be directed to achieve corporate responsibility and how influential is civil society in the form of NGOs, for example? More and more detailed information is becoming available on the influential activities of TNCs but as yet there appears to be no game plan for where they fit in to canons of global responsibility. This article explores some possibilities.

Foreign direct investment as a factor of growth: The experience of European Union countries

The empirical literature on the growth impact of foreign direct investment (FDI) suggests a strong positive relationship between the two. Yet, the lack of evidence of a clear causality from FDI to growth impedes our ability to firmly conclude that FDI inflows are a driver and not just a consequence of higher economic growth. Just as a higher return on investment typically attracts more fixed investment, it should be no surprise that it also attracts more foreign investors. Having said that, we need to acknowledge that the difficulty of finding unambiguous evidence of causality from FDI to growth does not refute the notion that such a relationship nevertheless exists. As the growth literature suggests, many different factors combine to create an environment conducive to higher economic growth. Proper policies and institutions have been found to be particularly important over longer periods of time. In this context, we need to view FDI from a broader perspective than its direct and immediate impact on growth itself. Could it not be the case, for example, that foreign investors are more demanding than indigenous firms as regards a stable and favourable policy environment, good infrastructure and an appropriate human capital stock? If governments introduce policies and create institutions with the purpose of attracting FDI, they may create an environment more generally favourable to growth even though some of this growth is not the result of FDI per se. The evidence is stronger that FDI has been boosting growth directly in Central and Eastern European countries (CEE) than in the 15 countries of the European Union (EU-15). The reason, as we have argued, is that while these countries needed to bridge the technology gap to the more advanced countries, they nevertheless met some key conditions - especially in terms of human capital - which helped them bridge this gap more quickly with the help of FDI. In addition, the sheer magnitude of net FDI inflows helped sustain a higher level of domestic investment than would have been possible on the basis of domestic saving and debt-creating capital inflows alone. While FDI is expected to continue to contribute to economic growth in the CEE countries that have joined the EU, it is less clear whether the economic gains from FDI will be as high as during the transition from plan to market. The more the new EU members come to resemble EU-15 countries in terms of inward FDI stocks as a share of GDP, productivity, efficiency and level of technology, the less likely it is that FDI will have a positive influence on economic growth beyond what is observed in more advanced market economies. That said, FDI and the associated activities of transnational corporations will undoubtedly remain an important welfare-enhancing force - both inside and outside an enlarged European Union.

Convergence or differentiation? American and Japanese transnational corporations in the Asia Pacific

As the global economic environment becomes increasingly driven by the activities of transnational corporations (TNCs) from different national origins, the question of convergence as opposed to differentiation in patterns of internationalization among TNCs has begun to intrigue a number of researchers. In this paper, we examine the extent to which the strategic functions of Japanese and American TNCs in the Asia Pacific have converged over time. We draw from a recent survey of TNCs conducted in Hong Kong and Singapore. Detailed analysis of TNC functions in both the manufacturing and non-manufacturing sectors suggests that convergence between Japanese and American TNCs has occurred most in the area of control-coordination functions among manufacturing firms, arising from a premium placed on intra-TNC organizational stability and isomorphism. On the other hand, substantial differentiation has occurred in functions that are associated with upstream and downstream processes, with Japanese TNCs emphasizing integration in marketing and manufacturing processes as well as forward integration. In contrast, American TNCs tend to focus on business and product development functions that enable them to exploit product and service differentiation.

Significance of location factors for Singapore transnational construction corporations

Dunning’s eclectic paradigm of international production, which focuses on the ownership, location and internalisation factors, presents a useful framework to explain the foreign value‐added activities of transnational corporations. “Eclectic paradigm” means a general framework or model chosen from what is preferred from various theories, systems or doctrines. The present study extends the eclectic paradigm to a study of Singapore transnational construction corporations (STCCs) and examines what location factors are viewed as the most significant for STCCs engaged in foreign value‐added construction‐related activities in their major international construction market. This study examines if these location factors vary significantly according to firm‐specific contextual variables in the STCCs, such as size, international age, multinationality and extent of specialisation/diversification, as well as the major reasons for STCCs to export their services overseas. The most important host location factors identified by STCCs operating in other Southeast Asian countries are: the host governments’ attitudes, policies and regulatory framework; the social, political, cultural and geographic factors; and the cost of doing business factors.

Patterns of technological activities of transnational corporations affiliates in Brazil

Using factor analysis of indicators of different types of technological input, we have identified distinct behaviours of transnational corporation subsidiaries in Brazil. We show that such diversity of technological strategies has been influenced by the size of firms, the industrial sector to which the firm belongs and the nationality of foreign capital. Copyright , Beech Tree Publishing.

ECLAC, transnational corporations and the quest for a Latin American development strategy

paper analyses the role assigned to foreign direct investment and transnational corporations in the ECLAC development project, examining the history of the institution and its most representative publications. With impressive continuity in its vision and policy recommendations, ECLAC has recognized the need for foreign investment as an aid for Latin American development, but has been cautious about its consequences. ECLAC has continually called for close scrutiny and regulation of the activities of transnational corporations. The main idea underlying these recommendations is that Latin American-owned industries have to be the guiding forces of economic development. In addition, ECLAC has consistently stressed the benefits of Latin American integration in helping expand Latin American industries, foster autochthonous research and development and provide Latin American governments with information and bargaining power vis-a-vis transnational corporations.

Transnational Corporations in World Development – Still the Same Harmful Effects in an Increasingly Globalized World Economy?

Transnational corporations (TNCs) have reached historically unprecedented weight and power in the world’s political economy. Thus, the old question of how these corporations a?ect global development is nowadays more signi?cant than ever. While some scholars claim that corporate globalization will eventually close the worldwide development gap, many others contend that TNC activities lead to insu?cient exploitation of growth potentials within the host country, thereby hindering convergence of national income levels. The present study aims at assessing the validity of these controversial positions by confronting them with the results of past and present empirical research. In the ?rst part, we examine the e?ect of TNC presence on intra-national income inequality by reviewing the most recent cross-national studies dealing with this issue. In the second part, we present the results of our own research, which analyzes the e?ect of TNC presence on economic growth in a sample of 84 countries. The contemporary empirical evidence discussed in the ?rst part as well as the results of our own analyses tend to con?rm earlier ?ndings. They suggest that dependence on TNC activities increases inequality without adding to economic growth. However, the strong negative e?ect of TNC presence on growth found in analyses of data from the late 1960s cannot be reproduced in our contemporary analysis. In a signi?cant number of cases, the potentially harmful consequences of TNC activities seem to have been overcome by adequate countervailing state actions.

Transfer Pricing Policy for Bangladesh

As Bangladesh tries to increase the level of foreign direct investment, the authorities may formulate a transfer pricing policy to reduce the scope for detrimental profit-shifting activities of transnational corporations. A simple model to illustrate the role of transfer pricing in intra-corporate cross-border trade is presented. It is argued that while Bangladesh's transfer pricing policy should be based on internationally accepted principles, it will have to be suitable to the situation of the country and congruent to the administrative capability of the national tax authorities. Key challenges and further research topics in transfer pricing issues pertaining to Bangladesh are identified and discussed.

Labour Law Beyond Borders

Flexible forms of transnational production and processes of economic globalization are increasingly challenging the traditional capacity of domestic labour law to promote justice in the world of work. At the same time, three international and transnational modes of regulation are forming beyond the state. First, the International Labour Organization is promoting a set of core labour rights with which all states ought to comply as a matter of international law. Secondly, numerous institutions and actors are linking international labour rights with trade liberalization initiatives. Thirdly, corporations are increasingly relying on codes of conduct to govern their employment relations. This paper argues that these developments are establishing relatively firm footholds in international law and operate in tandem to provide international legal authority for innovative domestic regulation of transnational corporate activity. Together with more general principles of international human rights law, they authorize a state to require all corporations operating within its jurisdiction and all corporations operating outside its jurisdiction seeking domestic market access to comply with a domestically enforceable code of conduct that enshrines international labour rights. Such a requirement should be contained in legislation that institutionalizes core features of modern legality and extends financial assistance to foreign communities adversely affected by corporate compliance.

Labour Law Beyond Borders

Flexible forms of transnational production and processes of economic globalization are increasingly challenging the traditional capacity of domestic labour law to promote justice in the world of work. At the same time, three international and transnational modes of regulation are forming beyond the state. First, the International Labour Organization is promoting a set of core labour rights with which all states ought to comply as a matter of international law. Second, numerous institutions and actors are linking international labour rights with trade liberalization initiatives. Third, corporations are increasingly relying on codes of conduct to govern their employment relations. This paper argues that these developments are establishing relatively firm footholds in international law and operate in tandem to provide international legal authority for innovative domestic regulation of transnational corporate activity. Together with more general principles of international human rights law, they authorize a state to require all corporations operating within its jurisdiction and all corporations operating outside its jurisdiction seeking domestic market access to comply with a domestically enforceable code of conduct that enshrines international labour rights.

Towards a Regional Strategy: The Role of Regional Headquarters of Foreign Firms in Singapore

This paper presents a framework for analysing the role of regional headquarters in the globalisation strategies of transnational corporations (TNCs). Drawing upon a theoretical gap in existing urban studies and international business literature, we argue that the triadisation and regionalisation of TNC activities increase the demand for control and co-ordination functions previously performed by the global headquarters. Many global corporations consequently establish regional headquarters to penetrate into emerging markets, which may be too geographically distant to be co-ordinated and managed by the global HQs, and to achieve simultaneously global integration and local responsiveness. Based upon an empirical survey of 130 RHQs in Singapore and 20 follow-up personal interviews, we test some of the propositions of this regional strategy framework. Our findings tentatively confirm that three independent variables play a statistically significant role in shaping the strategic decision by global corporations to establish RHQs in Singapore: geographical distance, strategic necessity and the availability of business services.

The Effects of the Financial Crisis in the Mature Asian Nics: “Enterprise Association” and its Modifications

The Asian financial crisis can be attributed in part to the “enterprise association” model of governance pursued in East and Southeast Asia. As a consequence, business has served governmentally defined ends, the independence of the social sphere has been stymied, and autonomous legal institutions have been slow to develop. Although this model has conditioned important policies pursued in Singapore and Taiwan, other influences have mitigated - though unintentionally - its worst effects. In Singapore, the elites have seen the importance for international financial credibility of the rule of law as it applies in many areas of commerce; the desire to limit for political ends the development of a powerful local bourgeoisie has encouraged it to keep the country particularly open to the activities of trans-national corporations. In Taiwan, the division (before the mid 1980s) of politics and business which reflected the divide between “mainlanders” and “Taiwanese”, and the institutionalised resourcing of the ruling Kuomintang by the state, along with the “Taiwanese” (and thus potentially autonomous) character of most political and social movements, modified the business-government nexus. Comparison with Korea illustrates the different outcomes where analogous factors do not operate.

Transnational Corporations and Their Regulation: Issues and Strategies1

In each decade since 1960, transnational corporations (TNCs) have tripled their foreign direct investment stock, such that worldwide sales of foreign affiliates are now 1.5 times greater than total world exports. In 1997, 53,607 TNCs controlled nearly 450,000 foreign affiliates located around the globe. According to the United Nations Centre on Transnational Corporations (UNCTC, 1990: 22), the major role in the world economy now played by TNCs leave[s] them not fully under the control of a single corporate office against whom national regulations can be applied. This paper identifies the issues perceived as requiring TNC regulation, and examines various international and supranational strategies that have been designed to control transnational corporate activities and to maintain national sovereignty. It is concluded that in order to preserve national sovereignty in a global economy, authority must be coordinated and shared across borders.