Multinational Enterprises Research Articles

Navigating the Impact of Multinational Enterprises on Labor Rights: Barriers to Justice in Developing Countries

The rise of multinational enterprises (MNEs) presents both economic opportunities and significant challenges, particularly in developing countries. This essay examines the adverse effects of MNEs on labor markets in these regions, focusing on redressing corporate rights violations and the barriers to justice for affected workers. The legal frameworks in both host and home countries often fail to hold MNEs accountable due to weak regulatory mechanisms and the corporate veil doctrine. International regulations, such as the UN Guiding Principles on Business and Human Rights, provide some guidance but lack enforceability. Recent due diligence laws in Europe offer promising steps toward corporate accountability, yet they fall short by excluding meaningful participation from stakeholders in the Global South, whose socio-economic realities are crucial to addressing MNE-related issues. The essay advocates an integrated approach that involves Global South governments, civil society, and local communities in decision-making, risk assessments, and enforcement processes to ensure justice and equitable protection for affected workers.

Education and Pressure in Learning in an Unequal World -- Take Sub-Saharan African Countries as an Example

It is widely acknowledged that the educational level and quality in sub-Saharan African countries are relatively backward in terms of educational resources, systems, faculty, and so on, even exacerbating social inequality. This paper conducts an in-depth exploration of the educational model in this region, expounding the definition of transnational pressure and its embodiment in education. This paper focuses on studying the current educational situation in sub-Saharan African countries, enumerating the existing educational pressures and practical problems. Finally, by making a comparison with Finland, which has a relatively developed educational system, drawing the successful experience that South African countries can learn from it, measures for improving the educational system in sub-Saharan African countries are proposed from both domestic and international perspectives, like conducting teacher training, dispatching volunteers, and cooperating with multinational enterprises. To raise the level of education and the overall quality of the population, along with the significance of educational sociology.

Theories of firms and the emergence of multinational enterprises: the organizational and managerial implications of solving transactional problems versus creating exchange value

Theories of firms and the emergence of multinational enterprises: the organizational and managerial implications of solving transactional problems versus creating exchange value

Transformational leadership, ESG performance, corporate reputation and competitive advantage: a serial mediation model

PurposeGiven the competitiveness of the business environment globally, environmental, social and governance (ESG), which represents a sustainable development framework that integrates environmental, social and corporate governance factors, has become an increasingly recognized concept in emerging markets. In the case of Ghana, its implementation is influenced by several factors, including leadership.Design/methodology/approachDrawing on the resource-based view theory, higher-order theory and stakeholder theory, we developed and evaluated a serial mediation model to explain how ESG performance and corporate reputation can connect transformational leadership to enhance competitive advantage. Utilizing the Process Macro model 6 in SPSS, data were collected from 340 senior managers/executives and middle-level managers from European multinational firms operating in Ghana.FindingsThe results indicate that transformational leadership positively affects ESG performance. Enhanced ESG performance, in turn, leads to improved corporate reputation, which subsequently results in a stronger competitive advantage.Research limitations/implicationsThis study is limited to European multinational firms operating in Ghana, which may restrict the generalizability of the findings to other contexts or regions.Practical implicationsThe findings suggest that organizations aiming to strengthen their competitive advantage should prioritize transformational leadership practices that foster ESG initiatives, as these are critical drivers of corporate reputation and market positioning.Originality/valueThis study provides new insights into the interwovenness between ESG performance and leadership in enhancing corporate reputation and competitive advantage within the context of emerging markets.

Cross-border political ties: foreign firms’ campaign contributions and the crowding out of domestic competitors

Abstract A substantial body of literature has shown that political connections have benefited firms domestically, but their cross-border value for multinational enterprises (MNEs) remains understudied. This paper provides novel evidence on the strategic advantages MNEs gain through political ties in host countries and the consequences for domestic firms. Examining foreign companies’ contributions to US political campaigns through political action committees (PACs) sponsored by their US subsidiaries, we find that contributing foreign firms win significantly more U.S. government contracts than non-contributing foreign firms. Crucially, this increased access for foreign contributing firms crowds out government contract allocation to similar domestic firms that do not make political donations, even in regulated industries favoring domestic suppliers. Our findings demonstrate that MNEs can effectively leverage political connections as a non-market strategy to gain preferential treatment over local competitors in a host nation. However, these cross-border political ties come at the expense of domestic firms’ competitiveness, informing policy debates around restricting foreign corporate influence in domestic elections. From a managerial perspective, our findings suggest that strategic political ties are an important consideration for MNEs alongside traditional location factors when evaluating foreign investment decisions and navigating institutional complexities abroad.

The glue that binds: how organizational identification drives innovation performance in foreign-owned subsidiaries

PurposeAlthough organizational identification has been recognized as crucial for multinational enterprises, its configurations regarding innovation performance at the subsidiary level have hitherto received scant attention. Accordingly, the purpose of this research is to identify the types of configurations in which organizational identification in foreign-owned subsidiaries leads to high innovation performance.Design/methodology/approachWe base our research on social identity theory and the neo-configurational perspective to test our framework using survey data collected from subsidiaries located in Thailand and Vietnam.FindingsOur results provide evidence that organizational identification serves as a glue that binds strong inter- and intra-organizational network relationships to drive innovation performance. While we find some variation in that pattern between the two host countries, it appears overall that the conditions of expatriates in top management and the geographic distance between home and host country only play a peripheral role. We identify the “integrated innovation driver” and “distant local hub” as two subsidiary archetypes that show how organizational identity can drive high innovation performance in subsidiaries.Originality/valueThis study is one of the first to empirically investigate the main complementing factors in the context of organizational identification and innovation in foreign-owned subsidiaries, which have previously predominantly been investigated in isolation of each other.

Tax-avoidance profit shifting by multinational firms: evidence from Vietnam

This study investigates the profit-shifting activities of multinational firms in Vietnam from 2006 to 2019. Our results indicate that transfer pricing is the primary method of multinational profit shifting in Vietnam. Moreover, the responsiveness of reported operating profits to tax incentives is found only at subsidiaries of parent companies that originate in tax havens and mainly at large foreign subsidiaries but not smaller ones. We also find a significant shift in tax avoidance practices among foreign firms linked to tax havens after 2017, when stricter regulations aligned with standards by the Organization for Economic Cooperation and Development were enforced. Despite these changes, multinational tax avoidance persists. Our study suggests that cross-border multinational profit shifting is more complicated than previously known, and the dyadic profit-shifting pattern between tax havens and developing countries, such as Vietnam, deserves more attention.

Article: How Did Anti-tax Avoidance Measures Affect ETRs and Profit Shifting?

This study examines the impact of anti-tax avoidance measures on the effective tax rates (ETR) and profit shifting activities of Multinational enterprises (MNEs) across several key countries. It employs a two-pronged approach to evaluate the effectiveness of the base erosion and profit shifting (BEPS) Actions 3 and 13 in particular. First, the study analyses the generally accepted accounting principles (GAAP) ETRs of large listed firms. Second, the data from tax reconciliation is utilized to investigate ETR items. The findings show a significant increase in ETRs since 2017 which suggests a reduction in profit shifting due to implementing CbCR and controlled foreign company (CFC) rules. However, the effectiveness of these measures in terms of profit shifting varies across countries. France and Germany have demonstrated substantial improvements while Sweden has exhibited positive but volatile results. In contrast, Switzerland and the United Kingdom have presented outcomes that are more complex and nuanced. The study highlights the necessity for continuous fiscal vigilance and implementing adaptive tax policies in order to effectively combat tax avoidance.

Maximising the (unequal) benefits of foreign direct investment: addressing the two-speed problem

ABSTRACT The UK is made up of broadly two types of local economies, characterised by two types of equilibria. One, ‘high-skill equilibria’, consists of richer localities throughout the country (e.g. London, South East, Cambridge, Oxford) which attract high-tech FDI, venture capitalists, high levels of innovation, skills and productivity. Another, ‘low-skill equilibria’ locations, have low levels of innovation, skills and productivity, even despite high levels of activity, in some cases. The notion of the two equilibria was recognised in an earlier volume of Contemporary Social Science and discussed in some detail in the editorial by Fai and Tomlinson (2023). The purpose of this paper is to explore the potential policy interventions for inward investment, focused not merely on growth, but on productivity growth, with the core purpose of helping lagging regions recover. We present a framework which explores how inward investment can be leveraged to ‘move the dial’ in lagging regions of the UK, rather than merely offering more of the same in terms of output, productivity and employment opportunities – which would attract activity that is subsequently rather divorced from the rest of the local economy. Our proposed framework summarises the nature of the interaction between multinational enterprises (MNEs) and the host economy, enriched with insights from supply chain analysis, economic geography and the trade-offs involved in delivering transformative growth and productivity.

“Vous parlez anglais?” “Pas du tout”: cross-cultural challenges faced by Chinese inpatriates in France

PurposeChina is playing an increasingly prominent role in global business. However, there has been relatively little research on Chinese inpatriates working in Western countries, particularly in non-Anglo cultural contexts. This study attempts to explore the process of cross-cultural adjustment (CCA) and integration into corporate headquarters of Chinese inpatriates working in France, including the favorable factors that accelerate this process.Design/methodology/approachBased on a qualitative, single-case study of Group X, a pseudonym for a French multinational enterprise, the authors drew on semi-structured interviews with 18 Chinese inpatriates and investigated their CCA and integration process at the French headquarters of their employer.FindingsThe CCA and integration process of Chinese inpatriates at the French headquarters includes three stages: honeymoon and/or crisis period, adjustment and/or integration period and mutual growth period. Chinese inpatriates mainly face language barriers and Sino-French cross-cultural challenges. They overcome these challenges by learning the language and culture of the host country and using co-cultural and cross-cultural Guanxi. Experiences vary, with some Chinese inpatriates bypassing the honeymoon and/or crisis stage and entering directly into the adjustment and/or integration stage and some even leapfrogging both initial phases to attain a stage of mutual growth. Favorable factors for this CCA and integration acceleration include experience of living abroad, the host country language proficiency, organizational service support and the English working environment.Originality/valueThe study enhances the theoretical framework of Chinese expatriates’ psychological adjustment process through two key contributions. First, it enriches the three stages by incorporating new aspects, namely the honeymoon facet at the crisis stage, the integration into the headquarters facet at the self-adjust stage and the promoting organizational growth facet at self-growth stage. Second, it adds precision to the horizontal timeline by incorporating two additional initial points for the adjustment and integration process. Until now, Chinese inpatriates and the French context have received little attention, and this research takes a step forward by illuminating the CCA and integration process of Chinese inpatriates in this non-Anglophone country.

How does organizational stigma damage employees’ innovative performance? An emotional labor perspective

In this rapidly developing and technologically advancing business environment, innovation has become crucial to an organization’s success. However, very few studies have explored the effect of organizational stigma, a negative label that becomes prevalent and situational in nature, on employees’ innovative performance. Using survey data from 151 employees in the overseas business departments of five Chinese multinational enterprises blacklisted by the U.S. government, along with one-on-one follow-up interviews with 17 participants, this study uncovers a psychological mechanism behind the negative relationship between organizational stigma and employees’ innovative performance. Specifically, organizational stigma prompts employees to engage in surface acting, which further leads to emotional exhaustion as employees are unable to replenish their emotional resources due to the negative experience of organizational stigma. This emotional exhaustion, in turn, diminishes the emotional resources employees can devote to innovative behaviors, resulting in a decline in their innovative performance. Moreover, this study identifies stigma attribution as a moderating factor, where employees who attribute stigma to positive appraisal-related causes experience a lesser decrease in their innovative performance. By combining quantitative surveys with qualitative interviews, this study not only helps bridge the gap in understanding the impact of organizational stigma at the relatively unexplored employee level, including its underlying mechanisms and boundary conditions, but also offers practical insights for managers on how to mitigate the negative effects of organizational stigma on employees’ innovative performance.

Institutional Complementarity and Substitution in Indian Multinational Enterprises’ Cross-Border Investment Decisions

Institutional Complementarity and Substitution in Indian Multinational Enterprises’ Cross-Border Investment Decisions

Research on the Impact of Digital Transformation on Enterprise ESG Performance: Based On the Perspective of Enterprise Dynamic Capability

At a time when more attentions are paid to green environmental protection at home and abroad, enterprises need more driving forces to do ESG practices. Digital transformation with the help of digital technology, this new quality productivity provides enterprises with a new way of thinking and power to enhance ESG performance. Explore whether digital transformation can enable ESG performance of enterprises, so as to provide certain practical significance for enterprises to firmly carry out digital transformation, improve ESG performance of enterprises, and obtain new sustainable competitive advantages of enterprises. This paper focuses on the empirical study of the relationship between digital transformation and ESG performance of Shanghai-Shenzhen A-share listed multinational enterprises from 2011 to 2022, and explores the mechanism of digital transformation affecting ESG performance from the perspective of dynamic capabilities of enterprises. The results show that the degree of digital transformation has a positive relationship with ESG performance. Based on the research conclusions, the following suggestions are put forward: At the government level, the government should provide strong policy guidance and resource support for the promotion of digital transformation, solve difficulties and dredge blocked points. Continue to deepen the understanding of ESG concept, expand the influence of ESG, guide enterprises to take the initiative to practice ESG concept, cope with the voice of foreign countries in the ESG field, and support the acceleration of the construction of ESG rating system with unique Chinese characteristics. At the enterprise level, enterprises should integrate digital transformation into corporate strategy and management activities, actively seize the opportunities of digital development to achieve green transformation, improve the quality of internal control, and lay a good foundation for sustainable development of enterprises.

How Does Media Coverage of Corporate Social Irresponsibility Influence Cross-Border Acquisition Completion? Evidence from Chinese MNEs

Abstract Previous studies have found that media coverage of a firm's corporate social irresponsibility (CSiR) often delays or blocks the completion of a cross-border acquisition when the acquiror is a multinational enterprise (MNE) from an emerging market. Drawing from the attention-based view, we argue that the effects of Chinese MNEs’ CSiR on deal completion vary depending on several contextual factors, as these factors garner more attention by making the deals more salient to stakeholders. Using a sample of cross-border acquisitions by Chinese MNEs from 2013 to 2020, we find that CSiR media coverage per se does not decrease the likelihood of a deal's completion. However, consistent with attention-based arguments, we find that CSiR media coverage negatively affects the deal's completion when the acquirors are state-owned enterprises and when the target country has high institutional quality. Our findings enhance our understanding of the effects of CSiR on cross-border acquisitions by highlighting the moderating roles of contextual factors related to stakeholder attention. Thus, it is important for MNEs to recognize the boundary conditions that may influence the potential sanctions from local stakeholders. Based on these findings, this study contributes to the literature on CSiR, cross-border acquisitions, and stakeholder attention.

Extended state infrastructure power in an age of networked competition: The cases of Thailand and Taiwan

Scholars have highlighted the emergence of infrastructure as a key domain in the struggle over network centrality in what some call the ‘Second Cold War’ between the U.S. and China. We qualify this ‘infrastructural turn’ by drawing attention to the contingent nature of state infrastructural power as depending on key domestic firms that often serve as intermediaries between domestic infrastructure and global supply chains or international partners. Utilising empirical case studies based on field research conducted between 2021 and 2023 in Thailand and Taiwan, we analyse the ways in which state infrastructure power is exercised through strategic negotiation between national politics of the state and territorial investment decisions of multinational and major domestic firms within global supply chains. The study highlights how outcomes of state projects to foster connectivity or centrality in networks are shaped by contingent and sometimes ad-hoc coalitions between state agencies and domestic and multinational companies with their own interests and agency. In the case of Taiwan, the centrality of Taiwan Semiconductor Manufacturing Company (TSMC) to global supply chains makes it an important player amidst continued U.S.-China tension. In Thailand, CP Group’s connections to China have afforded it a role as an interlocutor between Thailand and China, allowing it to obtain state infrastructure contracts. Through comparative case studies the paper complicates both ‘globalist’ and methodologically nationalist perspectives on the ‘infrastructural turn’, and introduces the concept of ‘ extended state infrastructural power’ to account for this complex, networked exercise of state authority.

Inward internationalization and cross border acquisitions by emerging economy multinational enterprises: The moderating role of family and institutional ownership

Mergers and acquisitions are a complex and persistent global phenomenon. Theoretical cross-fertilization enhances our understanding of their behavior, especially in different contexts. We use organizational learning theory and institutional logic perspective to hypothesize the direct effect of inward internationalization, the negative moderating effect of family ownership and domestic institutional ownership, and the positive moderating effect of foreign institutional ownership on cross-border acquisitions (CBAs) by emerging economy multinational enterprises (MNEs). Based on data from 199 Indian MNEs over nine years consisting of an unbalanced panel with 1619 observations, our findings supported all the hypotheses except the moderating effects of domestic institutional ownership. Our findings explain that the impact of learning from inward internationalization on CBAs is not similar for all firms; rather, it depends upon ownership groups because of their institutional logic. We have proposed socioemotional wealth logic for family ownership, cautious fosterer logic for domestic institutional ownership, and yield maximizer logic for foreign institutional ownership. Our findings enhance our understanding of firms’ CBA behavior by utilizing theoretical cross-fertilization and examining CBAs in an emerging economy context.

Rediscovering the multinational enterprise: the rise and fall of ‘corporate escape’ studies

Recent scholarship has revealed the rapid post-1980s growth, dramatic scope, and socio-economic consequences of multinational enterprises’ (MNEs) corporate tax avoidance and tax haven use. But why did social scientists only start systematically studying these dynamics in the 2010s? This is especially puzzling for International Political Economy (IPE) given that early IPE, in the 1970s, centered analyses of MNEs and their tax affairs under a rubric that Charles Kindleberger called ‘corporate escape’. Drawing on a collective oral history from pioneer interviews, historical documents, and bibliometric analysis, we identify two factors that explain the 1970s origins, the late-century fall, and the recent rise, of corporate escape studies: engagement with transdisciplinary technical knowledge of MNEs, and interaction with the politicization of MNEs. We explain how researchers abandoned the corporate escape agenda in the 1980s–1990s, losing technical insights from cognate disciplines and institutions, and refocusing around economistic and macro-structural analyses. These factors also elucidate why corporate escape studies only fully reinvigorated in the 2010s with political tailwinds and renewed investments in transdisciplinarity. These insights contribute to debates on IPE history and research, reintroduce MNEs as key meso-level institutions, and underscore the importance of historical awareness for studying corporate (mis)conduct and global inequalities.

Study on the Criminal Regulation of Foreign Commercial Bribery by Chinese MNEs

Abstract: In the process of global economic integration, Chinese multinational enterprises (MNEs) have continued to expand their overseas operations, becoming significant players on the international commercial stage. However, the acceleration of their internationalization process has been accompanied by escalating issues of foreign-related commercial bribery, which erodes MNEs' reputation and interests and poses challenges to China's international image. This paper commences by delving into the recent status of China's criminal legal framework regulating foreign-related commercial bribery committed by MNEs, highlighting specific provisions in the Criminal Law of China as well as other pertinent regulations. Subsequently, the paper proceeds to pinpoint the shortcomings and deficiencies within the existing legal regulatory system, notably including issues such as jurisdictional evasion and ambiguous definitions of specific concepts like the scope of bribe recipients. Drawing extensively from international legislative experiences, including the United States' Foreign Corrupt Practices Act, the UK's Bribery Act, and the United Nations Convention against Corruption, this paper finally distills successful practices and offers valuable recommendations for enhancing China's legal system. The proposed measures encompass clarifying the definition of bribery acts, refining the scope of bribe recipients, and enriching sentencing factors. Moreover, the paper highlights the necessity of motivating corporate compliance through legal means, thereby curbing bribery at its source. This study provides research support for refining China's anti-overseas bribery legal framework, which in turn can bolster the credibility of Chinese MNEs in the international market, foster the growth of China's transnational commerce, and elevate China's international competitiveness.

Foreign business exposure, policy uncertainty, and investment allocation decisions of Chinese multinational corporations

Using unique subsidiary-level data of 3863 Chinese non-financial firms from 2000 to 2019, we document that the multinational firms have 5.3 % higher capital expenditures than domestic firms, relative to the average. After decomposing firms' investment into domestic and offshore investment, we find that the increased capital expenditure of multinational firms results from their offshore investment allocation in response to policy uncertainty in the domestic market. Our analysis suggests that, in the face of domestic uncertainty, multinational firms switch to their offshore markets as a means to reallocate investment, rather than in response to offshore investment opportunities, access to foreign capital, or domestic competition. Overall, this paper helps us better understand the real options theory in the context of international business.

Talent philosophies and institutional factors as determinants of talent management in SMEs: a French country-specific empirical investigation

PurposeTalent management (TM) is a crucial strategic issue for global organizations, extending beyond multinationals and big companies to encompass small and medium-sized enterprises (SMEs) and contexts outside the Anglo-Saxon sphere. However, TM in SMEs is still under-researched, with a lack of studies and evidence on TM determinants and TM in practice. This study explores, using the lens of institutional theory, how talent philosophies and a combination of institutional factors shape TM in French SMEs, highlighting the interplay between these elements within the specific context of French SMEs.Design/methodology/approachGiven the limited knowledge about TM determinants in SMEs and the need to uncover and understand the phenomenon investigated, this study is exploratory in nature and lends itself to a qualitative research approach. In-depth semi-structured interviews with 27 CEOs, managers, TM and HR managers across 15 SMEs in France provided a comprehensive cross-industry perspective.FindingsThe study reveals that talent philosophies in French SMEs are predominantly inclusive and development-oriented, influenced by institutional factors such as the cultural logic of proximity and personalization, state support mechanisms like the Fonds Unique Interministériel (FUI) and legal frameworks that emphasize equal opportunity. Organizational elements like size and proximity foster a community-focused, egalitarian TM approach, while ownership and vulnerability lead to a reactive and informal TM strategy. The study presents a model that links these determinants to the specific TM approaches observed in French SMEs, illustrating how institutional factors like centralized control and egalitarianism shape TM practices.Research limitations/implicationsThis paper highlights the need for more empirical studies on talent philosophies, institutional and organizational factors not only in SMEs but also in comparison with multinational enterprises (MNEs), through institutional theory. Particular attention should be paid to the homogenization of SME sizes based on their level of establishment.Originality/valueThis study extends studies on TM determinants in SMEs, from the perspective of talent philosophies, utilizing insights from French institutional theory. It is also among the few and new studies to highlight contextual issues of TM as well as how TM is practiced depending on internal and external factors.