Activities Of Multinational Corporations Research Articles

Governance and environmental inequality in Nigeria: implications for conflict management strategies in the Niger Delta

This paper examines the role of governance in environmental inequality in the Niger Delta. Fair access to environmental resources could help to guarantee human security and mitigate violence. Root causes of environmental inequality in Nigeria’s Niger Delta can be linked to government policies and laws such as the Land Use Act and the negative impacts of the activities of multinational oil corporations. Environmental inequality and its concomitant effects produce a trend to conflict in the Niger Delta.

What's the Risk? Bilateral Investment Treaties, Political Risk and Fixed Capital Accumulation

This article argues that the political risk associated with foreign direct investment (FDI) is primarily a function of investment in fixed-capital, and not a homogeneous feature of FDI. As such, empirical tests of a political institution's ability to mitigate political risk should focus directly on investments in fixed capital and not on more highly aggregated measures of multinational corporation (MNC) activity, such as FDI flow and stock data that are affected by the accumulation of liquid assets in foreign affiliates. We apply this to the study of bilateral investment treaties (BITs). We find that BITs with the United States correlate positively with investments in fixed capital and have little, if any, correlation with other measures of MNC activity.

Does it really take the state?

This paper explores the role of the state for an effective engagement of multinational corporations (MNCs) in corporate social responsibility (CSR). In the OECD context, the “shadow of hierarchy” cast by the state is considered an important incentive for MNCs to engage in CSR activities that contribute to governance. However, in areas of limited statehood, where state actors are too weak to effectively set and enforce collectively binding rules, profit-driven MNCs confront various dilemmas with respect to costly CSR standards. The lack of a credible regulatory threat by state agencies is therefore often associated with the exploitation of resources and people by MNCs, rather than with business’ social conduct. However, in this paper we argue that there are alternatives to the “shadow of hierarchy” that induce MNCs to adopt and implement CSR policies that contribute to governance in areas of limited statehood. We then discuss that in certain areas such functional equivalents still depend on some state intervention to be effective, in particular when firms are immune to reputational concerns and in complex-task areas that require the involvement of several actors in the provision of collective goods. Finally, we discuss the “dark side” of the state and show that the state can also have negative effects on the CSR engagement of MNCs. We illustrate the different ways in which statehood and the absence thereof affect CSR activities of MNCs in South Africa and conclude with some considerations on the conditions under which statehood exerts these effects.

Emerging economies and multinational corporations

PurposeThe purpose of this article is to analyze the impact of the rise of emerging economies and emerging economy firms on multinational corporations (MNCs) with respect to four important strategic decisions for MNCs' foreign investment – control and coordination strategies, geographic and product markets of entry, timing of entry, and organizational design for foreign subsidiaries.Design/methodology/approachThe author utilizes an integration of institutional perspective with the existing explanations of MNC activities, to support their arguments about the impact of the rise of emerging economies on MNCs' strategy and structure decisions. The author presents propositions linking the type of external governance structure in the emerging economy's institutional environment (rule based or relationship based) with the strategy and structure decisions for MNCs.FindingsThe paper proposes that MNCs will follow different control and coordination strategies, geographic and product market strategies, entry timing strategies and organizational design strategies depending on whether the target emerging economy's institutional environment is characterized by a rule based or a relationship based governance structure.Originality/valueIncreasing globalization and rapid rise of emerging economies and emerging economy firms has not only opened up many opportunities for MNCs, but also raised many challenges. Extant literature has, however, not paid enough attention to how MNCs can best make use of the opportunities available in emerging markets, while taking care of the associated challenges. This paper is unique in providing a holistic framework pertaining to important strategic decisions that MNCs have to make, with specific reference to emerging markets.

Functional education, militancy and youth restiveness in Nigeria’s Niger Delta: The place of multi-national oil corporations (MNOCs)

The oil-rich Niger Delta region of Nigeria has been in global focus for sometime due to youth restiveness and lately, militancy occasioned by the disruption of activities of multi-national oil corporations, hostage taking of both foreign nationals and Nigerians alike. This paper opines that functional education is the only panacea to the prevailing situation in the region. By functional education, the paper means such that will equip youths of the region to compete favourably with their peers from within the country and beyond, for job placements (at high levels) in oil companies. The paper calls on the multi-national oil corporations to take ‘the bull by the horns’ in this respect by building and equipping the primary and secondary schools in the region to international standards; and also, paying some reasonable allowances to teachers in such schools to avert their attraction to other sectors. The paper sees this as a long-term, but most effective instrument to curb the negative tendencies of youths in the region. Key words: Functional education, militancy, youth restiveness, Niger delta, multi-national oil corporation.

Oil, gender and agricultural child labour in the Niger Delta region of Nigeria: implications for sustainable development

The Niger Delta region of Nigeria continues to face the problem of agitations, violent conflicts, crimes, rural-urban migration, environmental degradation, militant resistance engendering a frightening state, characterized by violence and criminality in the form of kidnapping, prostitution, escalating unemployment, and vandalization. This paper examines how the activities of oil multinational corporations has compromised agriculture and child labour in the region. This paper is expository and analytical in thrust. It is based on data collected through a survey conducted amongst agricultural child labourers in Rivers State of Nigeria. The sample consisted of 180 respondents drawn from Afara, Kpite-Tai and Tombia, communities all in Rivers State using the purposive sampling technique. A total of 90 parents/guardians were also drawn from the three communities. The study assessed the relationship between oil and gas exploration, gender and the agricultural child labour. The relationship between household size and agricultural child labour and the relationship between health-related hazards and girl-child labour. Data generated from the survey were subjected to statistical analyses using simple percentages to establish primary correlation. It revealed that there is a significant relationship between (a) household size and child labour, and (b) oil and gas exploration and gender and child labour. This paper, was also viewed through the lens of Marxian Feminist Theory. Finally, some recommendations were made, top of which the existing poverty alleviation programmes in the country should be targeted at the girls’ and women first. Keywords: Gender, Agricultural child labour, Niger Delta, Poverty, Oil, Multinationals.

The Initiative to extend Medicare into Mexico: a case study in changing U.S. Health Care Policy

This study examines the geo-political activities of interest groups, governments and multinational corporations involved in an initiative to extend Medicare to U.S. retirees residing in Mexico. If the initiative to change the current Medicare policy succeeds, the relocation of Medicare-eligible populations from the U.S. to Mexico is likely to increase; the U.S. is expected to gain cost-savings for taxpayers on Medicare; Mexico can develop senior-housing and options for long-term care it currently lacks; and foreign-led multinational corporations will increase their profits and dominance, fostering even more privatization in Mexico’s health care sector. By exploring new issues about retirement migration and health this study seeks to gain knowledge about the phenomena in a number of areas. First, the retirement migration of North Americans to Latin America is an under-studied phenomenon in the fields of social gerontology, migration research, and health policy studies. Second, the Medicare in Mexico initiative is even less well-known among health policy scholars than the retirement migration phenomenon into Mexico. Yet this initiative is inherently international in scope and involves a number of US-based institutions and interest groups actively promoting the project from within Mexico. Thus, the initiative has important geo-political and socio-economic implications for reforming health care systems in the U.S. and Mexico.

Work and Neoliberal Globalization: A Polanyian Synthesis

This article reviews sociological research about economic globalization’s impact on work and labor in developed and developing countries since the 1980s. We find that this period of neoliberal globalization influences work because of intensified activities of multinational corporations (MNCs), financialization of the global economy, and amplified prominence of international organizations, some of which diffuse neoliberal policy scripts while others mobilize a transnational civil society. Research we review generally points to liabilities of neoliberal globalization for workers. To understand these findings, we apply Karl Polanyi’s concepts of fictitious commodities, the self-regulating market, and the double movement. We propose that, on the one hand, the activities of MNCs, international financial organizations, and many states exemplify pushes for institutional separation of economy and society in effort to institutionalize the idea of a self-regulating market at a global scale, which increases labor commodification and global inequalities. On the other hand, the activities of social movements, including unions and transnational actors that target globalization’s impact on work, constitute the counter movement at national and global levels resisting marketization and pushing for labor decommodification. The aftermath of the ongoing economic crisis will tell to what extent this countermovement will be successful in generating an alternative to neoliberal globalization, and more protections for workers.

Multinational Oil Corporations and Governance in Nigeria’s Niger Delta in the era of the Resource Control Agitations, 1994-2004

This paper is a critique of the activities of multinational oil corporations and their cronies on matters concerning Nigeria’s oil producing areas between 1994 and 2004. Their activities which have come under the radar include the supply of arms to Nigeria’s Armed Forces and the Polic;, the detention, trial and execution of a popular Niger Delta activist, Ken Saro Wiwa and the distribution of money to chiefs and the youth. This paper offers historical explanations to debunk the popular view that agitations across the region (Niger Delta) were ethnic-based or efforts by minority people to get more representation in government and request for more revenue; rather it argues that it is a response to the failure of the government to regulate and control the activities of the multinational oil corporations thereby encouraging massive exploitation of Niger Delta people’s land and resources. The paper concludes that the past military regimes and the succeeding Obasanjo’s democratic administration did not manage the Niger Delta problem properly.

CSR strategy in multinational firms: focus on human resources, suppliers and community

PurposeAccording to recent developments in the literature, the spread of corporate social responsibility (CSR) principles would inevitably have a significant impact on foreign activities of multinational corporations (MNCs). Two forces seem to have influenced multinational firms' behavior: social maturity from international society and cultural evolution of political thought in several developed countries (DCs). The literature has already pointed out the importance of the multinational firm's function as a moral agent, identifying different components of respect for a sustainability management system. Based on these assumptions, the purpose of this paper is to frame MNCs' behavior within CSR, stressing the importance of a different approach to the management of local resources and stakeholders. The paper will argue for a shift of perspective concerning workers, suppliers and community, from resources to be exploited to partners and co‐creators of MNC values.Design/methodology/approachIn the research design, the authors use the case method, choosing a multiple case studies research composed of five firms, with three criteria: international firms with an international supply chain, firms with a formalized CSR management and organization process and the accessibility of firm data.FindingsIn this paper, CSR emerges as the comparative advantage concept that forms the basis of the international distribution of multinational activities, calling for a new theoretical viewpoint that necessitates a rethinking of MNCs' strategies.Originality/valueMNCs are opening toward responsible and sustainable business strategies. Workers, suppliers and communities represent the true challenge ahead, and the management of relationships with these actors is the starting point for an internationalization in a more integrated ethical and economic view.

How external partnering enhances innovation: evidence from Chinese technology-based SMEs

If China is to make the leap from being a manufacturer of goods, often for others, to being a world-class innovator, then Chinese small and medium sized enterprises (SMEs) have an important role to play in achieving this future goal. Much recent debate has focused on innovation activities of multinational corporations in China, with little attention paid to the role of indigenous SMEs and how they attempt to become more innovation oriented. This paper presents findings from 10 case studies of SME firms based in the Zhejiang Province of China to try and establish to what extent external partnerships have helped them become more innovative and competitive. The most common forms of partnering used by these firms is collaboration with universities, with customers and key suppliers, which has implications for how learning and absorptive capacity affects the firm's innovation strategy.

MNCs and micro-entrepreneurship in emerging economies: The case of Avon in the Amazon

Abstract This article examines the activities of multinational corporations (MNCs) in the direct sales industry through an ethnographic case study of micro-entrepreneurship in the Brazilian Amazon. In large emerging economies, intra-country heterogeneity poses challenges for MNCs. Because national trends often obscure regional variations, the case study highlights the realities of the rural Amazon, and the specific challenges and potential for MNCs. Findings from the case study support three propositions. The development of direct sales networks in remote areas facilitates: (1) additional entrepreneurship, and encourages a progression from necessity to opportunity entrepreneurship; (2) social change in gender norms, including higher level of female empowerment and decision-making within families and communities; and (3) a reconciliation of local and global values on beauty and fashion for customers, leading to stronger brand relationships. By leveraging micro-entrepreneurship, MNCs can compete with local firms, even in rural areas lacking basic infrastructure, to the benefit of communities and individuals.

Globalisation and Labour Utilisation in Nigeria: Evidence from the Construction Industry

This study examines the influence of globalisation on labour utilisation in Nigeria using the construction industry as a case study. It reveals that the era of globalisation has given rise to profound changes in the way labour is utilised, specifically in terms of employment patterns as well as the related issues of earnings, job security, unionisation etc. In effect, the way the worker is used by the firms in the industry is determined solely by the dictates of capitalism, i.e. the profit motive. The conclusion is that the consequences of globalisation havebeen unfavourable to the workers in the so-called ‘semi-skilled’ category. Thus, neo-liberal globalisation, contrary to the often-benevolent impacts attributed to it, has worsened rather than improved the situation of workers in the construction industry in Nigeria. This then calls attention to the need for inter alia a more focused regulation of the activities of Multinational Corporations (MNCs) andthe enforcement of minimum ILO standards in member countries, especially in the developing world where the need to attract the all important foreign investment may override any other consideration.

Comment on “US Foreign Direct Investment in East Asia: Strategy and Policy Issues”

Mahani and Izzatina (2009) address five distinct sets of issues: the pattern of foreign direct investment (FDI) flows between East Asia and the USA (Section 2); the determinants of US FDI flows into East Asia (Section 3.1); the formulation of FDI policies in East Asian economies (Section 3.2); policy issues for Asian economies (Section 4); and US policy issues (Section 5). Unfortunately, these five topics remain poorly integrated in the final draft, perhaps because it is impossible to integrate them successfully in a single, journal-length paper. The paper is thus somewhat confusing and it is sometimes difficult to see how the various topics are related to the authors' key messages, or for that matter, to discern what the key messages are. For example, in the abstract, the authors state, “Bilateral free trade agreements with the USA are the likely channel for these [FDI policy] changes . . .” and then in Section 4.1 they state that “Bilateral FTAs are regarded as better than multilateral agreements as a way of opening the services sector.” However, this point is never mentioned in the conclusion, and the authors never acknowledge the fact that any proposal to use bilateral FTAs as a means of opening up the services sector is likely to be highly controversial to many, if not most international economists. The fundamental problem with any bilateral FTA is of course the potential to create inefficiencies through trade diversion, and this important drawback to a policy of promoting bilateral FTAs is never acknowledged. The authors are correct to emphasize the potential benefits of further liberalization of restrictions on inward FDI in Asian host economies, but I think there is a serious potential for creating large, offsetting inefficiencies if bilateral FTAs are relied on to facilitate liberalization. Rather I would have preferred more emphasis on the benefits of unilateral liberalization, both as they relate to past experience and the potential effects of future policies. On a more mundane point, the focus on FDI stocks in Section 2 is not very appropriate if the goal is to evaluate the extent of US multinational corporation (MNC) activity in Asia and related policies. This is because FDI stocks are related to not only the real activity of affiliates (as a source of financing purchases of fixed assets) but also to liquidity preferences of affiliates receiving the FDI (e.g. their demand for financial assets in a host country) and the structure of their finance sources (local vs. foreign sources of equity [defined in a balance sheet sense to include reinvested earnings] and loans). For example, note that the FDI stocks only accounted for 17 % of all liabilities (=assets) on the books of non-bank affiliates in East Asia in 2004 (US Department of Commerce, 2008). In this respect, I think that focusing on sales or employment of affiliates would have been more useful in this context. One important point that the analysis totally misses is that a large portion of US FDI in non-manufacturing was in petroleum extraction, especially in Indonesia where mining accounted for three-fifths of the FDI stock in 2004. In addition, although the paper does acknowledge that local sales were very large in China, it fails to sufficiently emphasize the importance of local sales region wide. For example, in 2004, local sales accounted for two-thirds or more of all sales by majority-foreign affiliates in Japan (90%), China (74%), Korea (89%), Taiwan (73%), and Thailand (71%); about half in Hong Kong (45%), Indonesia (49%), and the Philippines (57%); and over one-third in Malaysia (42%) and Singapore (34%), according to the US Department of Commerce, 2008). These facts are also inconsistent with the statement that “the major motive for US investment in East Asia is to export to the MNCs' home and to other third countries” in Section 3.1. The paper does contain a number of useful discussions, especially on the need for further policy liberalization, improved education, and further institutional development in host East Asian economies. Unfortunately, these discussions are mixed in with confusing points, such as those mentioned earlier, which means that the reader should be careful to check underlying details when using this article.

Does China receive more regional FDI than gravity would suggest?

Summary It is an empirical regularity that the activities of multinational corporations are concentrated in their home region. This has been shown to be the case for a majority of the 500 largest multinationals as well as for subsets of this 500 sorted by region or industry. The analysis has also been applied to the activities of a sample of all US and OECD multinationals, aggregated by country. These concentrations have been explained using theories, such as region-bound FSAs which constrain the ability of multinationals to internationalize, as well as transactions costs which make doing business outside a multinational’s home market more costly. To date, there has been no analysis that focuses on the regional and global character of multinational activity destined for China. This paper works to fill that void. Using data on FDI into China from each investor country over the period 1995–2005, this paper documents a significant regional concentration of Asian multinational activity operating within China. This regional concentration is sustained even after the special relationships with Hong Kong and (other) Offshore Financial Centres are accounted for. The evidence therefore extends the evidence of regional concentrations of MNE activities found elsewhere to China and its relationship with Asia.

CSR in Ghana? Diversity should not mean dumping

Purpose – The purpose of this paper is to explore corporate social responsibility in context of the dumping of electronic waste (e‐waste), inferior products and second‐hand goods, and related activities of multinational corporations' (MNCs') subsidiaries in Ghana. It aims to suggest examples and recommendations to help curb the negative effects of dumping in Ghana.Design/methodology/approach – Research into specific e‐waste and scavenging activities and its impact on indigenous people and the environment is analyzed. Furthermore, findings on relevant stakeholders who have interest in this menace are reviewed. There is also a general discussion of the effect of other import/export activities that are tantamount to dumping.Findings – One can often observe ignorant scavengers around “recycling sites” demarcating their portions of the waste which includes discarded computers, televisions, micro‐waves, radio sets, and VCR amongst others. These wastes are often carried to strategic points where these people the...

Is the Common Good Improved by Economic Globalisation and the Activities of Multinational Corporations?

After embracing globalization, some countries have achieved fast growing. Meanwhile, many multinational corporations (MNCs) have made significant profits and also contributed a lot to economic growth. However, opponents believe that the benefits haven’t been equally shared and view it “as a threat to prosperity, cultural integrity, and the environment” For developed countries that compete successfully in the globalisation process, globalisation causes great economic growth and prosperity .On the contrary, developing countries that are excluded in the globalisation process become more marginalized and more vulnerable. Although globalisation has many benefits, the common good hasn’t been improved by economic globalisation and the activities of MNCs.

Rivalry Deterrence In International Markets: Contingencies Governing The Mutual Forbearance Hypothesis

The mutual forbearance hypothesis states that when the same competitors meet in multiple markets, rivalry is deterred. Our study highlights how pressures for local responsiveness impact the veracity of this hypothesis for multinational corporations (MNCs) in host countries. We develop theory to explain how subsidiary ownership, home-host cultural distance, host country regulatory restrictions on MNC activities, and the presence of local competitors affect the rivalry-dampening impact of multi-market contact. We tested our hypotheses with a sample of 13 global automobile companies operating in 27 countries and report strong support for our hypotheses.

Free trade agreements and vertical-specialisation in East Asia

Regional integration in East Asia has been described as ‘market-led’ integration driven by the activities of multinational corporations creating vertical specialisation. This paper investigates the effect of free trade agreements (FTAs) on vertical specialisation-based trade by employing a gravity estimation for a sample of nine East Asian countries plus the US. We find that FTAs promote international trade based on vertical specialisation and enhances deep integration between countries. The FTA effect on vertical specialisation-based trade increases with pre-agreement vertical linkage level, that is, the deeper the real integration between countries the larger the FTA impact. The results of this paper also suggest that deeper economic integrations, such as currency unions, will enhance trade based on vertical production by reducing the risk of exchange rate volatility.

Coordinated vs. liberal market HRM: the impact of institutionalization on multinational firms

The impact of institutionalized contexts on the HRM activities of multinational firms has become a focus of increasing attention in recent literature. However, theories of how different types of business systems or market economies may influence HRM, and the impact of context on multinational corporations (MNCs) operating under these different conditions are still not fully tested. In this paper the influence of the extent of institutional embeddedness of different national contexts (based on varieties of capitalism theory) on the HRM activities of MNCs is explored through the use of extensive survey data from four countries: the UK, Germany, the Netherlands and Sweden. Evidence is found of differences in HRM practices between foreign- and domestic-owned MNCs, as well as between MNCs and domestic organizations. Although less than expected, the restricted amount of leeway within a coordinated economy also appears to have differential effects on the various HRM practices explored in these foreign and domestic organizations.