Role Of Multinational Enterprises Research Articles

Material footprints in global value chains with consideration of multinational enterprises

The world has witnessed an unprecedented growth in extraction of materials and natural resources in the past few decades. The emerging of multinational enterprises has dramatically challenged the understanding of materials along Global Value Chains. To have a full picture of world material footprints, it is essential to understand to what extent materials are re-distributed by trade and investments. This study employs an Environmental-Extended multi-regional Input-Output approach with explicit consideration on multinational enterprises to trace the embodied material flows along Global Value Chains. The results show that both the outsourcing and offshoring of production by trade and the overseas investments by multinational enterprises contribute to the surging material extraction in developing countries. The results also highlight the role of fixed capital formation in driving the increase of the material footprints. The sustainable development goals call for collaboration of all nations with more focuses on the role of multinational enterprises.

Modern slavery and the governance of labor exploitation in the Thai fishing industry

Is modern slavery in the Thai fishing industry effectively suppressed through multilevel supply chain governance? This paper elaborates on existing theory concerning governance synergies, then analyzes how labor governance, exerted at multiple levels within and across the supply chain, affects modern slavery. Exposing the motivations, capabilities, and methods used by different actors in response to the publicization of slavery in the Thai fishing industry, we aim to understand better how their interactions may deter the abuse of workers’ rights. Adopting a phenomenon-based approach and engaging with systemically identified academic and grey literature, we detail several key responses to revelations about modern slavery by a range of actors—private, public, and social—focusing particularly on the role of multinational enterprises as lead firms. We find that, despite significant achievements to date, opportunities still exist for key governance actors, multinational enterprises in particular, to drive further remedial change in the Thai fishing industry. We conclude that misalignments in governance objectives should be redressed through synchronized supply chain governance. This requires states to take advantage of their capability to ensure international norms are given expression in national cultural institutions, thereby aligning and coordinating the disparate efforts of governors in the public sphere, civil society, and the private sector.

Advancing societal grand challenge research at the interface of entrepreneurship and international business: A review and research agenda

Societal grand challenges are increasingly attracting the attention of both entrepreneurship and international business scholars. While entrepreneurship focuses on the opportunities that emerge and need for bold and innovative solutions, international business research emphasizes the global reach of the challenges and role of multinational enterprises. Although both conversations are insightful, we argue that examining one without the other gives an incomplete picture on how to address grand challenges. In this paper, we conduct a systematic review of the conversation on grand challenges in the international business and entrepreneurship literature. Upon synthesizing the results, we create an integrated framework and research agenda for viewing grand challenges through an international entrepreneurial lens.

The Role of Multinational Enterprises in Achieving Sustainable Development Goals

The United Nations put forward 17 Sustainable Development Goals in 2015 that were to be achieved by 2030. The objective was to alleviate inequalities and create a fair society for all. The contention of this paper is that multinational enterprises (MNEs) can play an important role in achieving these goals. It is also envisaged that collaborative efforts of governments, society, and MNEs are necessary to achieve these goals. The impact of new realities, particularly the COVID-19 pandemic, is discussed. Many companies are now claiming to pursue these goals. We call for more research to analyze these activities to separate rhetoric from the reality.

The role of MNEs in regional smart specialisation strategies: evidence from San Luis Potosi, Mexico

Smart specialisation strategies have been adopted in Mexico to guide innovation policy towards strategic domains in particular regions. In San Luis Potosi, the presence of multinational enterprises (MNEs) in the automotive sector has fostered growth and shaped regional strategy. The sector is considered one of the three state priorities as an outcome of smart specialisation strategies. The article follows a case-study methodology based on secondary data as well as 16 interviews and 40 responses to a perception survey to shed light on the role of MNEs in regional innovation. The findings show that the presence of MNEs in the region has had productivity impacts but limited innovation impacts. A framework is suggested to guide policy action according to the MNE as well as regional characteristics. Moreover, the findings reveal the importance of facilitating related entrepreneurship.

Globalisation in agriculture and food: the role of multinational enterprises

AbstractThis paper reviews the state-of-the-art work on agri-food Multinational Enterprises (MNEs), by discussing the current state-of-play and the tools at our disposal to expand knowledge. After a critical discussion of available data, new data from OECD are used to provide a broad overview of the role of MNEs in the agri-food Global Value Chains (GVCs) and to draw a few stylized facts. Data reveals that in the food, beverages and tobacco industry MNE activity is higher than on average, while in agriculture it is lower; North-South flows are increasing as well as the role of MNE in the agri-food GVCs. The review of theoretical and of empirical literature shows how modern trade theories provide us with a strong theoretical background which, together with improved firm-level and country-level data, may help explaining observed patterns and effectively orientate empirical analyses of agri-food MNEs in several directions.

A vulnerable victim or a tacit participant? Extending the field of multinationals and corruption research

Are multinational enterprises (MNEs) makers or takers of corruption? This review focuses on corruption in the multinational context to highlight issues specific to MNEs, and captures 139 articles from 75 English journals over the period of 1999−2020. Our review not only highlights common themes around the contextual challenges facing MNEs, but also how a key strand of the literature focuses attention on the role of MNEs as active agents in corrupt practices. It is often implied that corruption is something endemic to the emerging markets, which MNEs from the north have to cope with if they have to do business there, rather than what significant numbers of such firms actively instigate or sustain. Hence, we challenge predominantly western perspectives informed by institutional-economic analyses that too often, pose a false dichotomy between the global north and global south. We draw out the implications for theorizing based on recent comparative institutional theorizing.

The long-term energy transition: Drivers, outcomes, and the role of the multinational enterprise

The pre-eminence of the production and consumption of nonrenewable fossil fuels is waning with the growth of renewable energy solutions. This long-term energy (LTE) transition is one of the global grand challenges, characterized by uncertain and evolving markets. Although this is a global issue, there are regional differences and non-linear trajectories that suggest that the LTE transition is a complex challenge for firms and countries. For international business scholars, questions related to the role and effect of multinational enterprises in the context of the LTE transition have opened new avenues for advancing theoretical, managerial, and policy understanding. Thus, we advance this body of research by presenting a framework that delineates important drivers and outcomes of the transition. In this way, we emphasize how MNEs both influence and are being influenced by the LTE transition. We identify theoretical perspectives that may be useful to address LTE transition challenges, and suggest avenues for future research on this global grand challenge.

Articles: Introduction to the Transnational Corporations special issue on multinational enterprises and gender equality

Foreign direct investment (FDI) and multinational enterprises (MNEs) are important sources of financing for developing countries. In this context, the United Nations Conference on Trade and Development (UNCTAD) has a long track-record of looking at both spillovers from FDI and gender equality. The policy study on investment by transnational corporations and gender provided a preliminary review of the academic literature on the impact of foreign investment on gender policy and practice, focusing on the wage and employment effects, and the related potential for women’s empowerment (UNCTAD, 2014). In addition, the 2020 World Investment Report (UNCTAD, 2020a) describes that the world’s leading multinational enterprises are increasing their gender equality reporting and policies, contributing to broader female representation and positive development impacts. Finally, several of the papers in this special issue served as background research for the UNCTAD (forthcoming) policy report on The International Transmission of Gender Policies and Practices: The Role of Multinational Enterprises. This original academic research was presented at an expert group meeting in May 2020, which brought together researchers, practitioners, and policymakers to discuss tangible policy recommendations and development impacts, while formally validating the quality of the research as part of the review process.

Can multinational firms promote gender equality? The role of labour mobility

A long and well-established literature exists on the role of multinational enterprises (MNEs) in transferring technology around the globe, enhancing local productivity. However, we know very little about the impact of foreign direct investment (FDI) and multinational enterprises on gender policy and practice. In this research, we focus on the role of MNEs in potentially promoting female empowerment and gender equality in Brazil. First, the research performs a descriptive exercise on the gender composition and gender earnings gaps at MNEs versus domestic firms. Then, we ask whether workers moving from multinational to domestic firms can transfer information about gender practice, by exploring the relationship across domestic firms with various proportions of workers with previous experience in a multinational. Unfortunately, despite the many theoretical reasons to expect MNEs to support and transfer best practice in gender policy, these ideas are not borne out in the data. Multinational firms employ fewer women and exhibit higher gender earnings gaps than their domestic firm counterparts. For this reason, it is no surprise that domestic firms with high shares of former MNE workers are not different from domestic firms with fewer former MNE workers in terms of gender policy and practice. Our work emphasizes the need for domestic policy to enhance the status of women in the economy and the international community to support best practice in gender policy across all types of firms.

The efficacy of multilateral anti-bribery convention with national government enforcement

Purpose The purpose of this paper is to investigate the role of multinational enterprises’ (MNEs) home country corruption in their decision to bribe officials in foreign host countries. Design/methodology/approach A model that predicts MNE bribing by controlling for a multitude of foreign host country factors is used. The information contained in the orthogonal residuals from this model is exploited to see whether MNE’s home country factors, particularly the level of public corruption, work to amplify illegal behavior by respective MNE in abroad. Findings MNEs pay more in bribes when the foreign officials they face are more corrupt. This behavior worsens when MNE’s home country has more corruption. Social implications All UN member countries are signatories to the UN Convention against Corruption that proscribes the bribing of foreign public officials by respective MNEs. The Convention’s reliance on home country enforcement of stipulations against the bribing of foreign officials by respective MNEs exposes its efficacy of the malfeasance of home country public officials. Originality/value This paper extends the literature to an examination of MNE’s use of bribes in a world with a global anti-corruption regime. Additionally, it ties MNE behavior in foreign countries to corruption in MNE’s home country.

Mr A preliminary comparative perspective on the role of multinational enterprises in influencing labour relations of their host nation

This paper examines the operations of multinational enterprises (MNEs) in so far as they are able to influence the public and labour relations policy and law of their host nation with a special attention on African nations. It is to be expected that MNEs would already be comfortable with the mechanisms in place for the resolution of labour-related or commercial disputes in their country of origin. The question then that arises is: If confronted with an employment relations situation in their host nation, would the MNE attempt to circumvent or adapt the process to suit what they are already familiar with? This could pose a challenge for the practice of international labour law. Literature (Briscoe, Schuler & Tarique, 2012; Eweje, 2009; Iyanda & Bello, 1979; Onimode, 1978) already alludes to the fact that MNEs tend to take the ‘line of least resistance’ if confronted with ‘higher’ labour standards.
 A comparative exploratory analysis was undertaken. The paper identified MNEs in selected African countries – Nigeria, South Africa, and Zambia – that have been reported to have had a challenge in dealing with labour-related or commercial standards of their host nation. The selected MNEs had been reported in the news media for having had a ‘run in’ with their host nation on, at least, a labour - or commercial law-related matter.
 The principal legislation governing labour relations in these countries are, in some cases, briefly highlighted to underscore the extent of their breach or disregard by the examined MNEs. Furthermore, a qualitative, thematic analysis of selected reported cases involving these MNEs were undertaken to highlight evidences (or instances) of attempts, if any, by the MNEs to circumvent the commercial, fiscal or labour standards of the host nation. Finally, it is hoped that the result of the above analyses would inform the possibility of proposing a framework for MNEs compliance with the labour standards of their host nation.

The Role of Multinational Enterprises in Achieving Sustainable Development - The Case of Huawei

The aim of this paper is to investigate the relationship between business and sustainable development, particularly the role of multinational enterprises (MNEs) as possible driving force for achieving sustainability. By following an inductive case study approach and referring to the Sustainable Development Goals (SDGs) of the United Nations, the sustainable undertakings of the Chinese MNE Huawei are explored. Published data on Huawei’s website and online resources like annual reports, news announcements, sustainability and corporate social responsibility reports are used for this purpose. The main findings indicate that Huawei can promote sustainable development internationally on three different levels: (1) products/services, (2) business operations and (3) social contributions. Based on these findings, a systematic framework is derived to help illustrate possible and classify existing MNE’s sustainability activities, as well as the related main stakeholders. This paper is useful for scholars and practitioners alike as it shows the compatibility of success in business with sustainability, as well as the potential of MNEs to contribute to sustainable development. Keywords: Sustainable Development Goals, business, multinational enterprises, emerging markets

The evolution of base of the pyramid approaches and the role of multinational and domestic business ventures: Value-commitment and profit-making perspectives

Anchored in the current controversy around the role of multinational enterprises (MNEs) in promoting base of the pyramid (BoP) initiatives in developing nations, this paper analyzes the evolution and changes in BoP approaches associated with the roles of MNEs and domestic business ventures at the BoP, applying both value-commitment and profit-making theoretical lenses. Despite the practical importance of BoP initiatives and the special role assigned to the MNEs involved, the literature shows a lack of established theoretical knowledge on the topic. This paper presents a review of the existing research on management studies, industrial marketing, strategies and related disciplines, and offers three main contributions. First, it provides a categorization of the literature into four approaches to BoP: 1.0 – ‘finding fortune’ at BoP; 2.0 – ‘creating fortune’ at BoP; 3.0 – ‘sharing fortune’ with BoP; and 4.0 – ‘enabling fortune’ with BoP. Second, it analyzes each of these BoP approaches by applying value-commitment and profit-making theoretical lenses, highlighting a persistent interactive tension between these perspectives and synthesizing the results into an integrative framework. Third, it offers a comprehensive agenda for future research and elaborates on the implications for business-to-business (B2B) research.

The role of multinational enterprises in global valuation

PurposeThe research proposition of this paper is that multinational enterprises (MNEs) were important in the process of growth and divergence that took place in the world in the nineteenth and twentieth centuries. The rate of growth of GDP per capita was unprecedented, but it was coupled with an increasing gap between the developed and the developing countries. MNEs are even more important in the growth and convergence process that started at the beginning of the twenty-first century where the gap is closing. Global sourcing is the strategy that has led to closing the gap while high growth continues. The paper aims to discuss these issues.Design/methodology/approachThe study is based on macroeconomics general equilibrium model in an imperfect market and on looking at the inventive process as the driving process of the development and the location of MNEs. Using a financial economics model of assets and liabilities, it is shown that MNEs affect the geopolitical distribution of income and wealth through expanding their liabilities. The methodology is a combination of applying economic model and using historical and current data to motivate the use of the model and to validate the models and the conclusions derived from them.FindingsMNEs and major global companies before the name MNE was used were shaped by major macroeconomic processes like the inventive process and the same time they were the prime movers of the two major economic processes of the last 200 years: growth and divergence and growth and convergence. The ideas-led growth model shows why MNEs are becoming larger. As MNEs became bigger they start to import inputs through value maximizing strategy of global sourcing. This led to transfer of value to suppliers in emerging markets that grow over time and eventually it led to new MNEs from emerging markets large countries like China and from smaller countries in Asia and elsewhere. The growth convergence process and the resulting changes in the geopolitical distribution of MNEs is assisted by rapid changes in technology that reduces transactions cost. The continuation of rapid changes in transactions costs is likely to change the current structure, strategy and the location of MNEs and may reverse the growth convergence process once more.Originality/valueThe study begins with aggregate macroeconomic processes and relates them to the development of MNEs and in particular to the development of MNEs from emerging markets. It highlights the importance of global value chains and global sourcing in the process of growth and divergence and the turning of the “Wheel for Fortune” toward China and India as it has been prior to the sixteenth century.

Sustainable Development and Multinational Enterprise Operations in Developing Countries: Role of Institutional Framework

The role of multinational enterprises (MNEs) for sustainable development, particularly in developing countries, has become a topic of debate among environmental, business, and economic researchers. In that context, we try to explore the compatibility and congruence of the business operations of MNEs vis-à-vis sustainable development in the developing part of the world. By using a multitheoretical framework followed with a multicase analysis concerning emerging and developing countries, we investigate how MNEs are addressing regional requirements of sustainable development where environment, local culture, and institutional mechanism are the key concerns. The adherence to evolving institutional mechanism over the years along with willful ethical steps taken by MNEs are found to be important in improving the state of affairs in the developing nations.

The role of MNEs’ internationalization patterns in their regional integration of FDI locations

Multinational enterprises (MNEs) use the regional aggregation and integration of their foreign direct investments as an important part of their internationalization. Internationalization decisions are integrated at the region level; however, little work has focused on explaining the extent of this regional integration. We develop theoretical arguments and test new hypotheses about MNEs’ general international experience and international geographic scope (i.e., institutional diversity and international dispersion) as predictors of their extent of regional integration. The results from a sample of Japanese MNEs validate these different effects, suggesting these MNE level variables are important for regional influences on their internationalization decisions. The results further our understanding of how MNEs organize their internationalization and strategic geographic foci.

Bridging the great divide? Making sense of the human rights-CSR relationship in UK multinational companies

Human rights (HR) and corporate social responsibility (CSR) are both fields of knowledge and research that have been shaped by, and examine, the role of multi-national enterprises in society. Whilst scholars have highlighted the overlapping nature of CSR and HR, our understanding of this relationship within business practice remains vague and under-researched. To explore the interface between CSR and HR, this paper presents empirical data from a qualitative study involving 22 international businesses based in the UK. Through an analysis based on sensemaking, the paper examines how and where CSR and HR overlap, contrast and shape one another, and the role that companies’ international operations has on this relationship. The findings reveal a complex and multi-layered relationship between the two, and concludes that in contrast to management theory, companies have bridged the ‘great divide’ in varying degrees most notably in their implementation strategies.

Internalization Theory and Internal Capital Markets of Multinational Enterprises

This study brings unique ideas from internalization theory in the international business (IB) literature to the study of internal capital markets, financing, and tax planning strategies of multinational enterprises (MNEs). Insights about the role of MNEs in overcoming external capital market imperfections through the use of internal capital markets are proving instrumental in understanding corporate international finance in MNEs. The ability to access capital in multiple locations to take advantage of differences in cost of financing, and to create a pool of internal financing sources through internal capital markets, which are used to fund international business activities, is an important firm- specific advantage (FSA) of MNEs. However, the use of internal capital markets may raise tax concerns because it gives MNEs opportunities to arbitrage tax differentials across countries to reduce the overall corporate taxes. This article synthesizes, critically analyzes, and assesses these lines of research with the goal of highlighting the main themes it explores, the key results it establishes, and the leading open questions it raises.

The role of multinational enterprises in the aerospace industry clusters in Mexico: The case of Baja California

The aerospace industry in Mexico has been growing significantly in recent years. This study seeks to determine the productive and organizational capabilities of multinational aerospace enterprises that are developing in the Baja California region, in northern Mexico, especially for the particular way in which they are joining the Global Value Chain. Undoubtedly, this is related to the way in which the industrial regions of developing countries are integrated into the global value chain by multinational corporations. Data for the analysis come mainly from ProMexico, a Mexican federal agency. According to results, at the present time Baja California aerospace industry integrates to the industry global value chains in the low steps, similar to what happens in other sectors and other regions around the country. Baja California activity specialized in manufacturing producing of parts or components for other foreign companies, which in turn are the ones that actually develop the aircraft’s systems and subsystems.