Large MNEs Research Articles

The Brave (and Uncertain) New World of International Taxation under the 2020s Compromise

When significant changes are made to the way the world allocates the right to tax cross-border income, there is an obvious need to assess whether the new regime is an appropriate response to the challenges posed by the perceived problems in the old regime. This article has two objectives: first, to show that the proposed changes to the international tax regime relating to the taxation of business profits are so significant that they are regarded as absolutely fundamental. Secondly, and far more controversially, to assert that the changes are brave and appropriate irrespective of the final assessment of these changes (which could be in a decade from now). This article asserts that the 2020s Compromise is a positive step forward for four reasons. First, and most importantly, it was necessary to overcome the deficiencies of the previous regime, particularly for large MNEs with a significant digital business footprint. Three other factors suggest that history might regard some of these changes as brave. These are: more effective source taxation with a partial move to taxation at destination, the rise of multilateral instruments and processes, and the increase in tax cooperation between countries or the reduction of tax competition. However, the absence of an articulated theoretical basis for taxation means both uncertainty and instability in the international tax framework for some time.

The innovative contribution of multinational enterprises to the Sustainable Development Goals

The 2030 Agenda recognizes the role of the private sector and calls on its innovative and creative capabilities to help solve sustainable development challenges. Judging by the embracement of the SDGs in sustainability reporting, this call seems to resonate. However, the extent to which companies actually make a contribution to solving SDG challenges remains unclear.This paper aims to explore this innovative contribution to the SDGs. It does so by assessing the level of SDG relevant innovation by the largest multinational enterprises in the world.We develop a method for the identification of SDG relevant patent applications, distinguishing between “green” patents, related to environmental themes, and “blue” patents, related to “improving conditions” and meeting unmet sustainable development needs. In addition, we explore whether the level of SDG relevant innovation is systematically associated with a number of company characteristics.Our results show that large MNEs have similar levels of green patents, and lower levels of blue patents, compared to smaller companies. Using regression analysis, we find that there are regional and industry-specific differences. Corporate sustainable development attributes such as Global Compact membership and sustainability reporting, are less convincingly associated. It can be concluded that MNEs play an important role in SDG relevant innovation, but that there are trade-offs between different SDGs. Some SDG relevant innovation is not commonly associated with sustainable development.This study attempts to quantify the actual effect of sustainability strategies of companies by identifying their sustainable patents and associates this to company characteristics, using a new method for sustainable patent identification. Moreover, SDG relevant innovation is taken beyond green innovation to include the whole range of technical innovation that is related to the broad range of SDGs.

National Cultural Practice, Diversification Strategies, and CSR Environmental Disclosures

This study examines the relationships between market strategies (international and product diversification) and a key pillar of nonmarket strategy, corporate social responsibility (CSR). It focuses on environmental CSR disclosures by MNEs in their annual reports. We rely on Institutional Theory and the Stakeholder perspective to make our arguments. We hypothesize two counter relationships between diversification and environmental CSR disclosures. We also examine the moderating role of an MNE’s home country national culture practices on the diversification – environmental CSR disclosures relationships. The study includes two higher order dimensions of GLOBE cultural practices: Performance Based Culture and Socially Supportive Culture. The sample includes 335 large MNEs from 31 countries then distributed among three CSR regimes: European, Anglo- Saxon, and Asian and emerging markets. Data was collected from publicly available sources from 2010 to 2012. The results show support for the hypothesized relationships between diversification and environmental CSR disclosures and that the direction of the relationship varies by the region of the world. They also provide significant support for the moderating role of national culture.

Cause-related marketing, legitimacy and internationalization of professional service firms

PurposeThe purpose of this paper is to address the role of legitimacy in internationalization to Africa of a Finnish professional service microfirm, which uses cause-related marketing (CRM) as the business model.Design/methodology/approachThe paper consists of a single case study of a microfirm (two employees) originating from Finland, which has successfully internationalized to many African countries. Due to the uniqueness of the context, the authors use semi-structured interviews to collect founders’ insights to the issue being addressed. Moreover, along with interviews, secondary sources related to football talent scouting in Africa are also utilized in the paper.FindingsThe authors found that the case company was established with the aim of helping and uplifting poor African footballers, so the business model is CRM. It has scouted many of them for professional football clubs in Europe. The authors further found that sociopolitical legitimacy plays a major role in dealing with African footballers and local stakeholders, while cognitive legitimacy helped the case firm gain the trust of European football clubs.Originality/valueInternationalization of microfirms operating in the service sector is a rather under-researched area compared to the internationalization of SMEs and large MNEs. The paper is one of the first to study internationalization of a professional service microfirm involved in scouting football talent in Africa and matchmaking them with European football clubs. It contributes to extant CRM and internationalization literature by being one of the first to analyze a firm whose business model revolves around CRM and discussing specific roles of different kinds of legitimacies needed for internationalization to Africa in this specific service sector.

The Importance of Size in Transfer Pricing Comparable Company Searches

We document the existence of a size premium for independent manufacturing companies in Europe: larger companies tend to have higher Return on Total Costs. This impact has a large magnitude and is statistically significant. Following the OECD Guidelines, the impact of size should thus be taken into account by Transfer Pricing practitioners when performing comparable company searches, in industries where such size premia are observed. The current practice of relying on small comparable companies to benchmark large MNEs should be revised.

The Unbalanced Geography of the World's Largest MNES: Institutional Quality and Head Office Distribution Across Countries

The Unbalanced Geography of the World's Largest MNES: Institutional Quality and Head Office Distribution Across Countries

Regional theories of the MNE: post the 2008 economic crisis

One model of the internationalisation strategies of large MNEs is ‘regional theory’, which predicts the international diversification of MNEs as movement into proximate markets and low geographical spread. ‘Regional theory’ suggests that the majority of firms – both MNEs and smaller, local firms – limit their diversifications to their home regions. This paper proposes instead that there are two different models evidenced. The data demonstrate the Yule-Simpson Paradox, a statistical anomaly when two different patterns cross-cancel and will suggest a third, incorrect outcome. There are also important intra-firm variations inside large MNEs that are not addressed by the original research. To test these hypotheses, we re-examine ‘regional theory’ after the 2008 crisis. The global automotive industry is used as a case study and shown to exhibit these multi-layered effects in its operation. The apparent conclusion is the 2008 crisis was a shock, but it has not prevented ongoing economic globalisation.

Born Global in Bangalore: Emergent Pathways for International New Ventures via Multinational Enterprise Networks

I briefly describe three new ventures in Bangalore, India that were founded at different stages of the local entrepreneurial ecosystem’s maturation process, and all internationalized from inception. As the Bangalore entrepreneurial ecosystem matured, the ventures engaged in progressively closer partnerships with the local subsidiaries of foreign multinationals that facilitated their (the new ventures’) internationalization. Thus I point to an upward trajectory in, and interface between, innovation activities of both foreign MNEs and indigenous new ventures. An important implication for international entrepreneurship research is the opportunity (and necessity) to explicitly incorporate the role of partnerships with large MNEs in future research.

Beijing or Shanghai? The strategic location choice of large MNEs’ host-country headquarters in China

We argue that a multinational enterprise’s (MNE’s) location choice for its host-country headquarters (HCHQ) in the geographic space of the host country is determined by the interplay between the strategic roles of HCHQ in the organizational space of the MNE and the institutional space external and internal to the MNE. We focus on the location choice between Beijing and Shanghai. We test our arguments using data for a sample of Fortune Global 500 corporations in China (1979–2005). This study contributes to international business (IB) research by reinvigorating research on HCHQ. We also complement economic geography research on subnational agglomeration by using an IB perspective with a focus on the institutional idiosyncrasies of cities.

Pitting real options theory against risk diversification theory: International diversification and joint ownership control in economic crisis

This study examines how MNE divestment decisions differ according to real options vs. risk diversification perspectives. We develop competing hypotheses in relation to international diversification and joint ownership control. Empirical results give consistent support to the real options perspective. We find that large MNEs with greater international diversification are less likely to divest their subsidiaries during times of economic crisis. The negative effect of joint ownership control is however manifested in both crisis-stricken and non-crisis country subsidiaries as well as in their interaction effect.

Small firm internationalisation unveiled through phenomenography

Phenomenography is proposed here as a qualitative methodology for investigating how owner-managers practise internationalisation in small firms, and it is applied in an empirical study of internationalising owner-managed small Australian wineries. The findings show a common internationalisation activity cycle but four qualitatively different ways in which these owner-managers practise internationalisation. We reveal that this variation in owner-manager internationalisation practices is determined by their understandings of internationalisation, which produce differences in the ways activities within their internationalisation activity cycle are orchestrated. In particular, phenomenography has enabled new insights into the multiplicity of firm internationalisation practices not able to be captured through other qualitative methodologies such as ethnography or semiotics, as they are not designed to capture such variation. Based on our findings, we propose an understanding-based theory to explain the idiosyncratic nature of owner-managed small firm internationalisation. Furthermore, we suggest that phenomenography, used independently or in conjunction with other qualitative methodologies, also has potential to reveal the varying practices of internationalising large MNEs by enabling an investigation of the collective or shared understanding of firm internationalisation within MNEs. Finally, we point out how phenomenography can be extended beyond firm internationalisation practices to investigate other topics within international business.

The geography of British exports: Country-level versus firm-level evidence

This study investigates the degree of regionalization of UK exporters. The firm-level findings, based on an original set of primary data of 356 UK exporters, are contrasted with the UK national trade flows as well as with the geographic spread of the UK, European and the world’s largest MNEs. The analysis produced consistent findings of regionalization regardless of the classification thresholds or sales matrices employed. The findings also imply that country-level data supports the firm-level findings of regionalization. While the analysis presents relatively strong corroborating evidence of regionalization of UK exports, it also indicates that UK exporters might be more multi-regional and global oriented than previously thought.

Rediscovering Urban Subcultures: The Contrast Between Shanghai and BeijingA Critique of the Beijingese?.Luo ShuangCity Monsoon: The Cultural Spirit of Beijing and Shanghai.Yang DongpingThe Bitterness of Cultural Travels.Yu QiuyuShanghai: Her Character is Her Destiny.Yu Tianbai

Previous articleNext article No AccessReview ArticleRediscovering Urban Subcultures: The Contrast Between Shanghai and Beijing A Critique of the Beijingese?. Luo Shuang City Monsoon: The Cultural Spirit of Beijing and Shanghai. Yang Dongping The Bitterness of Cultural Travels. Yu Qiuyu Shanghai: Her Character is Her Destiny. Yu Tianbai Cheng LiCheng Li Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by The China Journal Volume 36Jul., 1996 Published on behalf of the Australian Centre on China in the World at the Australian National University Article DOIhttps://doi.org/10.2307/2950384 Views: 69Total views on this site Citations: 5Citations are reported from Crossref Copyright The China JournalPDF download Crossref reports the following articles citing this article:Dong Dong, Chan Kara Adolescent Girls‘ Evaluation of Brands during Liminal Life Stages, International Journal of Trade, Economics and Finance 5, no.33 (Jun 2014): 249–254.https://doi.org/10.7763/IJTEF.2014.V5.379Xufei Ma, Andrew Delios, Chung-Ming Lau Beijing or Shanghai? The strategic location choice of large MNEs’ host-country headquarters in China, Journal of International Business Studies 44, no.99 (Sep 2013): 953–961.https://doi.org/10.1057/jibs.2013.49Jia Lu, Ian Weber Technology adoption and content consumption in Chinese television: Local city, national city, and global city, Telematics and Informatics 30, no.44 (Nov 2013): 393–401.https://doi.org/10.1016/j.tele.2011.02.003Jun Wang Evolution of Cultural Clusters in China: Comparative Study of Beijing and Shanghai, Architectoni.ca 1, no.22 (Aug 2012): 148–159.https://doi.org/10.5618/arch.2012.v1.n2.6Lei Xie China's Environmental Activism in the Age of Globalization, Asian Politics & Policy 3, no.22 (Apr 2011): 207–224.https://doi.org/10.1111/j.1943-0787.2011.01256.x