Multinational Corporations Research Articles

Labor Law Liability of Multinational Corporations in Global Supply Chain

This paper examines the labor legal liability of multinational corporations within the global supply chain in the context of economic globalization. The legal governance of this issue has complexity because it involves multiple stakeholders, including international organizations, nations, and multinational corporations. Thus it necessitates coordinated efforts in legislation, judicial processes, and self-regulation. While existing laws and the labor compliance efforts of some multinational corporations have partially safeguarded labor rights, significant deficiencies remain. Addressing these deficiencies requires sustained legislative and judicial input from public entities. This requires more substantial protection and even expansion of the supervisory power of international organizations, such as the establishment of a tripartite negotiation mechanism to ensure their right to participate as independent subjects in labor rights protection. Improving the litigation procedure legislation to give international organizations the right to file public interest litigation to protect the rights and interests of workers in domestic courts will also be a probable choice. Additionally, multinational corporations must take concrete steps to uphold labor rights. Possible practices include assigning independent labor oversight bodies to suppliers and involving labor representatives in labor compliance efforts. Clarifying and enhancing the management of their labor legal responsibilities requires the joint efforts of public and private entities.

Regional Logistics Capability and Foreign Direct Investment Location Choice of Multinational Corporations

Regional Logistics Capability and Foreign Direct Investment Location Choice of Multinational Corporations

Exploratory research on the internationalization speed of small and medium-sized enterprises

ABSTRACT The emergence of multinational corporations (MNCs) and their impact on the post–World War II economy has led to studies on the internationalization of companies, including MNCs. Traditional theories, such as internalization theory and the stage model, have explained internationalization processes. However, some companies, known as “born globals,” adopt a leapfrog strategy, rapidly entering international markets. This study, focusing on Thai MNCs, examines how these companies, despite limited resources, achieve growth through effective timing, pace, and the process of internationalization. Findings suggest that strategic partnerships significantly accelerate the timing and pace of internationalization. Considering internationalization, company managers should join formal networks to learn about the international market and export operations to find strategic partners. In promoting networking, the government should try to incorporate companies and organizations that can serve as strategic partners. The government should also provide small and medium-sized enterprises with information from this perspective and foster international entrepreneurial orientation.

Why Does Institutional Opening-up Promote the Enhancement of Innovation Capabilities in Chinese Enterprises?

China’s involvement in global economic governance has been a progressive and step-by-step ascent. While the domestic and international environment has undergone major changes, the process of economic globalization has taken on new trends, and China has entered a new stage of high-level opening up. This paper’s theoretical analysis suggests that high-level opening up helps enhance the quality of foreign capital utilization, thereby addressing the challenges associated with the lower technological benefits of previous foreign capital utilization and further facilitating the enhancement of innovation capabilities in Chinese enterprises. Guided by this theoretical framework, this study has measured the level of opening up in Chinese provinces from 2013 to 2022 using web crawling technology. Econometric tests conducted with Chinese enterprise panel data reveal that: firstly, First, it effectively promotes the improvement of the total innovation output of enterprises and significantly improves breakthrough innovation capabilities. This result still holds true under a series of robustness and endogeneity tests; secondly, it mainly improves local advantages and high-quality international The attraction of foreign capital and multinational companies enables local companies to achieve breakthroughs and catch-up in core technologies by learning and competing with advanced foreign companies, thereby enhancing their technological innovation capabilities; thirdly, for companies in different industries and different ownership attributes The impact of improving innovation capabilities may vary. This study helps promote a new paradigm of innovation-driven development in the context of high-level opening-up.

The evolution of tax strategies in multinational companies: a historical perspective

The evolution of tax strategies in multinational companies: a historical perspective

Examining the Impact of International Financial Reporting Standards Adoption on Financial Reporting Quality of Multinational Companies

Examining the Impact of International Financial Reporting Standards Adoption on Financial Reporting Quality of Multinational Companies

When digital taxes come due: national digital taxes and the negotiation of the OECD inclusive framework

ABSTRACT What explains major shifts in international tax cooperation? Existing literature emphasises either the centrality of the United States for successful reform or the power of multinational corporations to exert downward pressure on global tax rates. Nonetheless, in 2021 members of the OECD Inclusive Framework (IF) agreed to tax some of the largest multinational companies based on their market activities rather than physical presence – a fundamental change to the international taxation regime that the U.S. government and U.S. multinational corporations (MNCs) had long opposed. We argue that the spread of digital value chains has exposed the activities of MNCs to greater regulatory activity, allowing governments to use unilateral regulatory action as leverage in international negotiations. By shifting the reversion point – the status quo absent an international agreement – governments were collectively able to transform an agreement. We demonstrate our argument by examining how the implementation of national digital services taxes (DSTs) affected the OECD IF negotiations. Drawing on interviews with key stakeholders and primary sources, we show that the adoption of DSTs, including in France and India, and the threat of additional proliferation of DSTs, pushed the United States to drop its longstanding opposition to parts of the IF process.

Navigating the Regulatory Maze: The Vital Role of Regulatory Affairs in Pharmaceutical Safety and Quality

The real struggle of pharmaceutical industries for survival lies in performing processes by following the guidelines of various regulatory authorities around the globe to provide assured quality of the process under regulations [1]. A profession under-regulated industry, such as that controlling pharmaceuticals, medical devices, energy, and banking, is called Regulatory Affairs (RA) [2]. They may involve minor or major multinational corporations, including innovative biotechnology companies, which have a specific meaning and a separate specialized depart-ment of RA professionals. This department helps to guide the company on the regional and global laws and regulations set forth by different regulatory authorities and helps safeguard the products’ life cycle. The purpose of regulatory departments or pro-fessionals is to develop and promote heavily controlled therapeutic or pharmaceutical goods and build a platform for marketing approval. In addition to this, RA in the pharmaceutical industry is comparatively a new field to safeguard public well-being by monitoring the safety and efficacy of the products [3]. Furthermore, in the late 1950s, multiple tragedies resulted in an increase in legislation for pharmaceutical goods’ quality, safety, and efficacy. As a part of this, strict norms were made for Marketing Authorization (MA) and Good Manufacturing Practice (GMP) [4]. These tragedies included (i) sulphanilamide elixir; (ii) vac-cine tragedy; and (iii) thalidomide tragedy [4]. The present article covers the regulatory affairs’ responsibilities and importance in the context of pharmaceutical industries.

Non-arm's-length transactions, offshore financial centres, transfer pricing agreements and corporate cash holdings: Evidence from U.S. multinational corporations

This paper examines the association between non-arm's-length transactions, the existence of offshore financial centres, the existence of a transfer pricing agreement and corporate cash holdings for a large sample of U.S. multinational corporations over the 2006–2020 period. This study provides evidence that the existence of non-arm's-length transactions and of offshore financial centres increased the level of corporate cash holdings. In contrast, the existence of a transfer pricing agreement reduces the level of firm cash holdings. Overall, these results suggest that development of transfer pricing agreements with taxing authorities reduces multinational corporations' incentives and capacity to shift profits from higher- to lower-tax countries. These results remain robust to alternative specifications of cash holdings and endogeneity tests.

Global Integration vs. Local Responsiveness: Managing Strategic Dilemmas in Multinational Corporations

In the dynamic landscape of multinational corporations (MNCs), achieving a balance between global integration and local responsiveness poses a significant strategic dilemma. This study investigates how MNCs navigate this dual challenge to maintain competitive advantage and operational efficiency in diverse global markets. theoretical frameworks and empirical evidence to understand the strategic choices made by MNCs in integrating global operations while responding to local market demands. the tensions between standardized global strategies aimed at achieving economies of scale and localized strategies tailored to meet unique customer preferences, regulatory requirements, and cultural nuances. Key aspects analyzed include the strategic decision-making processes, organizational structures, and management practices that facilitate or hinder effective global-local integration. The study reviews case studies and comparative analyses of MNCs across different industries to illustrate successful strategies and best practices in managing these strategic dilemmas.

The Perception of Corporate Social Responsibility and Employee Flourishing: Cultural Diversity as an Underlying Mechanism

Corporate social responsibility (CSR) has been a field of interest over the past couple of decades. The challenges posed by rapidly evolving technology and frequently changing market conditions along with well-informed customers, have compelled firms to pay greater attention to their stakeholders and address social, economic, and environmental issues. This heightened focus on CSR reflects a growing perception that success transcends financial gains and encompasses broader benefits to communities and society. Moreover, there is growing recognition of the impact of internal CSR practices, which not only enhance a firm’s reputation, assets, and customer retention but also significantly influence the well-being, engagement, and satisfaction of their workforce. Currently, for some firms, particularly multinational corporations (MNCs), promoting internal CSR practices becomes particularly complex amidst diverse workforces encompassing varied languages and cultures. This study, thus, explores the relationship between perceived CSR practices and workplace outcomes, including the mediating role of cultural diversity. Based on data collected from 211 employees in 19 different countries, the results reveal that perceived CSR effects on employee well-being, satisfaction, and engagement are driven by diversified cultural settings. Accordingly, these findings reinforce the urgency to delve deeper into the implications of cultural diversity within CSR frameworks.

Advancing Arbitration for Multinational Construction Projects in Saudi Arabia Through Flexibility and Legal Reforms

The role of arbitration in resolving multinational construction disputes in Saudi Arabia is explored, focusing on procedural flexibility, confidentiality, and the impact of recent legal reforms. Multinational companies prefer arbitration over traditional litigation due to its closed process, which protects sensitive information—crucial in Saudi Arabia's privacy-focused business environment. Using qualitative methods like case studies, interviews, and legal document analysis, the research highlights key themes such as the need for arbitrators with technical expertise and cultural understanding, enhancing the arbitration process. Confidentiality is a major factor in choosing arbitration, offering protection from public exposure. Additionally, arbitration’s procedural flexibility allows for customized solutions, leading to faster dispute resolution. Legal reforms, including the Saudi Arbitration Law 2012 and the Saudi Center for Commercial Arbitration (SCCA), have strengthened the arbitration framework, boosting investor confidence and improving efficiency. Future research should examine the long-term impact of these reforms, assess the effectiveness of new arbitration institutions, and explore challenges in maintaining confidentiality and selecting competent arbitrators across sectors.

The Evolution of the International Monetary System: Impacts on Multinational Firms and Global Trade

The International Monetary System is a global system that regulates money transfers between different nations. It includes currency exchange rates, regulation of international payments, legislations on capital movements, and worldwide financial organizations, including the IMF. The paper analyses how the change over time of the International Monetary System (IMS) affects the international trade and MNCs. Thus, from the Bretton Woods new exchange regime established in 1944–1971 to the current floating exchange rate system, it has been analyzed in regard to the IMS's historical development. Because of the increasing volatility in the currency rate, this has consequently had an impact on the stability of international transactions and trade volumes. The IMS study investigates exchange rate systems, capital flow regulations, and the role of international financial organizations, including the IMF. For its methodology, the study resorted to a mixed-method approach, combining numbers analysis-that includes regression models and time- series data on exchange rates, amounts of international trade, and MNC performance-with analysis of the historical record and inspection of IMF policy documents. The study shows that trade goes down during big financial troubles, like the Asian Financial Crisis in 1997 and the Global Financial Crisis in 2008. It also shows that changes in exchange rates make global trade smaller, especially during these crises. Also, while IMF help, such as structural adjustment programs, often causes short-term problems for multinational companies (MNCs), like less foreign direct investment (FDI), these policies usually help stabilize economies and lead to recovery in the long run. The outcomes indicate how the IMS, international trade, and multinational corporations are intertwined. Acquainting oneself with the fluctuating money system is very crucial because it enables a person to make informed decisions about the world economy. Keywords: International Monetary System (IMS), Exchange Rate Volatility, Multinational Corporations (MNCs), International Trade, International Monetary Fund (IMF)

International operations and international influences – Investing in UK firms

We provide an alternative perspective on the benefits of investing in Multinational Companies (MNCs) using a unique hand-collected dataset on the location of UK firm's sales and subsidiaries from 1998 to 2015. We find that investors can gain diversification benefits from investing in MNCs, but not necessarily firms with the greatest global reach. We also show that firm's returns tend not to be influenced by the geographical regions where they report sales and subsidiaries. The results suggest a new category of firms that may be beneficial for diversification - firms that are significantly influenced by the stock markets of a geographical region but do not report sales or subsidiaries in that region. This implies that investors should analyse the geographical regions that influence firm returns rather than the location of their sales and subsidiaries. Intuitively, these should be the same, but our results show a difference between the geographical location of a firm's sales and subsidiaries, and the regions that influence the firm returns. We recommend that investors look beyond the location of MNC activities and investigate the geographical regions that influence firms' returns when creating portfolios.

The Myth of Deglobalization: Multinational Corporations in an Era of Growing Geopolitical Rivalries

Globalization is past its peak, we are told. The rise of populist anti-globalization movements and the return of geopolitical rivalries among great powers in the 2010s has put an end to free-wheeling corporate global capitalism. Or has it? This article summons available data on cross-border corporate investments at the level of countries (balance of payments), firms (subsidiaries and affiliates), and corporate managers (industry surveys). It pays special attention to the period between 2015 and 2021, which spans the election of President Trump and the outbreak of the Covid-19 pandemic that have unsettled global politics. We analyze global patterns in foreign direct investment positions and in particular the evolution of investments by US corporations in China, arguably a “most likely case” for deglobalization. Our analyses find no evidence that economic cross-border integration is in decline. The global allocation of corporate investments across the world’s major economic regions has remained stable. US corporations have not notably reduced their global activities. If anything, their aggregate investment position in China has increased during the Trump administration’s trade war. Overall, the results cast empirical doubts on prominent narratives about the state of the global economy. Geoeconomic transformations in world economic infrastructures may well be underway, but they are better understood as new and adapted forms of internationalization rather than the end of globalization.

EXPRESS: Impact of Dynamic Operations Complexity on Performance: the Role of National Culture

We build on the national culture, complex adaptive systems, and operations complexity literature to develop hypotheses about the moderating role of national culture on the negative relationship between dynamic operations culture and operational complexity. Monthly performance data were collected from 179 plants in a multinational corporation’s global plant network that spans all national culture clusters. We use random effects time series modeling to incorporate the transitory nature of this relationship and control unobserved heterogeneity over time. The results indicate that the relationship between dynamic operations complexity and operational performance is moderated by every dimension of national culture except gender egalitarianism and institutional collectivism. We contribute to the literature on complexity by introducing the dynamic operations complexity construct and showing the moderating effect of national culture. We contribute to the national culture literature by comprehensively examining the role of national culture supporting the national culture divergence thesis. Managerial implications relate to locating new plants in regions whose national culture is supportive of key goals and allocating tasks and products accordingly.

The Role of English Language Proficiency in the Global Economy and Business Communication

This research explores the role of English as a lingua franca in international business, focusing on its impact on business operations, economic communication, and cross-cultural interactions. The research objectives include understanding the relationship between English proficiency and business success, identifying common cross-cultural communication challenges, and exploring strategies to improve communication in global markets. Using a qualitative methodology, data was gathered through Semi-structured interviews conducted with 10 key informants, including 2 managers, 2 executives, and 6 employees from 2 multinational corporations and 2 small businesses that operate in global markets. Key findings indicate that higher English proficiency enhances business outcomes, while cross-cultural communication barriers often complicate international transactions. The study concludes that businesses should invest in language training to boost competitiveness and mitigate communication challenges in global operations.

Pengaruh Kebijakan Dividen Terhadap Kinerja Keuangan pada PT. Gudang Garam TB

Multinational companies in Indonesia, such as PT Gudang Garam Tbk, with complex financial statements, are interesting subjects for study. The company's capital ownership has increased annually, but this growth has not been accompanied by an increase in profits. The analysis is based on the financial statements of PT Gudang Garam Tbk for the period 2018-2022, using simple regression analysis. In this analysis, the dividend payout ratio, Return On Investment, and Return On Equity are considered as independent variables (x), while financial performance is the dependent variable (y). The study results show an increase in the dividend policy, but a decrease in ROI and ROE. Furthermore, the statistical analysis reveals that the dividend policy has a positive effect on financial performance, while ROI and ROE have a negative impact on financial performance. The findings indicate that the low profit growth is not due to high or low capital, but is instead caused by the return on investment (ROI) and return on capital (ROE) in the form of profit sharing. Hence, it is the return process that leads to declining or low profits.

Unveiling the relationship between the speed of internationalization and export resilience of MNCs in China: the moderating role of digital capability

ABSTRACT This paper presents a comprehensive analytical framework to examine the export resilience of multinational corporations (MNCs) in China, with a specific focus on the dual role of internationalization speed from both breadth and depth perspectives. Our findings unveil a nuanced impact: the speed of internationalization breadth (SIB) positively strengthens export resilience, while the speed of internationalization depth (SID) detrimentally impacts export resilience. Significantly, digital capability not only mitigates the adverse effects of SID but also amplifies the positive effects of SIB. Digitization acts as a catalyst, fortifying the advantages and alleviating the drawbacks in the relationship between internationalization speed and export resilience. These insights offer valuable practical guidance for MNCs in determining the optimal strategy and pace of internationalization to enhance export resilience.

Trust building across and within cultures: A study of Guinea, West Africa, and China

Adopting a cross-cultural perspective, this study provides insights into how Chinese multinational corporations (MNCs) with a focus on Confucian values, builds trust and contributes to the globalization process in African settings, specifically Guinea. Using a mixed-methods methodology, we explore the dynamics of trust relationships within and across cultures. In Study 1, semi-structured interviews were conducted with 19 Chinese supervisors, 20 Guinean supervisors and 19 Guinean workers. We found Chinese expatriates to emphasize ability and integrity in trust building while Guinean workers care more about benevolence. Drawing on the insights of study 1, we proposed a model of interpersonal trust within and across cultures. In this Study 2, data was collected from 182 Guinean workers and their direct Chinese/Guinean supervisors. We found Guinean subordinates’ trust in the organization to mediate between their trust in Guinean supervisors and their performance. In addition, Guinean supervisor’s trust in Chinese supervisor positively affects Guinean subordinate’s trust in organization and also moderates the positive relationship between Guinean subordinates’ trust in the organization and their performance. We draw implications for management relationships between two cultures that are seemingly different from both studies.