Strategies Of Multinational Corporations Research Articles

Strategic Application of Intellectual Property in Multinational Corporations

This paper explores the strategic application of intellectual property (IP) in multinational corporations (MNCs), aiming to reveal the impact of IP on the competitive advantage of MNCs. By analyzing the IP management strategies of various MNCs in the global market, this paper demonstrates the critical role of effective IP protection and utilization in corporate innovation, market expansion, and risk management. The study finds that IP is not only an essential part of a company's assets but also a core competitive advantage for MNCs to achieve sustainable development. This paper comprehensively analyzes the application of IP in MNC strategies from legal, economic, and management perspectives, providing theoretical support and practical guidance for IP management in the context of globalization.

A Study of the Correlation between ESG Strategies of Multinational Corporations and Their Market Performance

This paper firstly introduces the specific content of ESG strategy, which contains three aspects of environment, society and governance, and effectively measures the sustainability of enterprises through various social factors, as well as the potential risks beyond financial operations. Second, it is hypothesized that the improvement of ESG performance from multinational corporations contributes to the enhancement of corporate value, and that the improvement of ESG performance from non-state-owned multinational corporations contributes more to the enhancement of corporate value compared to state-owned multinational corporations. To verify that the hypothesis is valid, the direct impact of corporate strategic performance on market performance is compared. The results of the analysis show that the logarithm of the amount of OFDI of listed companies and corporate ESG performance show a positive relationship and is more prominent at 10%, with the presence of β=0.099, p<0.01. The ESG strategy of privately owned firms has a figure of 0.149***, which indicates that the ESG strategy performance in the enhancement of corporate value of privately owned firms shows a positive relationship at the 1% significance level. Positive relationship. Therefore, both hypotheses of this paper are valid and are significant in the study of the correlation between ESG strategies of multinational companies and their market performance.

BRIC in flux: Understanding the influence of energy policy uncertainty on foreign direct investment flows

AbstractThis research investigates the intricate relationship between energy policy uncertainty (EGU) and foreign direct investment (FDI) within the BRIC economies over a comprehensive 27‐year period, spanning from 1996 to 2022. Employing advanced econometric techniques such as FMOLS and DOLS for regression analysis, the study unravels the nuanced impacts of EGU on both FDI inflows (IFD) and outflows (OFD). Drawing upon a comprehensive data set, the analysis reveals a significant negative correlation between EGU and IFD, indicating that heightened energy policy uncertainties deter foreign capital from entering BRICS nations. Contrarily, the study unveils a paradoxical positive relationship between EGU and OFD, suggesting that energy policy uncertainties stimulate the outflow of FDI, reflecting the adaptive strategies of multinational corporations navigating uncertainties. The study further explores the role of government effectiveness, labour force and financial sector development, shedding light on their positive influences on IFD and negative impacts on OFD. These findings underscore the importance of effective governance, a skilled labour force, and financial sector development in attracting and retaining foreign investments. This research contributes to the literature on energy policy, governance and FDI, offering policymakers and businesses nuanced insights into crafting strategies that enhance the attractiveness of BRIC nations for foreign investments. The study's findings have implications for shaping stable energy policies, improving governance effectiveness and fostering conditions conducive to sustained economic growth and development.

Unveiling tax avoidance strategies of multinational corporations in Delta State

This study titled Unveiling Tax Avoidance Strategies of Multinational Corporations in Delta State investigates different tax avoidance strategies used by MNCs in Delta State , it specifically assessed the impact of transfer pricing on tax liability minimization, it evaluated the frequency of profit shifting activities, and analyzed the influence of digitalization on tax planning. A mixed-methods research design, integrating both qualitative and quantitative approaches, was adopted to provide a comprehensive analysis. The study employed purposive sampling to select key participants, including tax officials, financial managers of MNCs, and tax consultants in Delta State. Data were collected through structured questionnaires and semi-structured interviews, capturing both statistical and in-depth perspectives. Quantitative data were analyzed using descriptive statistics and regression analysis. The key findings revealed that transfer pricing and profit shifting are the predominant tax avoidance strategies used by MNC and Digitalization significantly impacts tax planning and there is a strong relationship between the period of operation and the use of transfer pricing. Recommendations made includes, Strengthening transfer pricing regulations to curb intra-company transaction manipulation, Enhance taxation frameworks to effectively tax digital transactions and intangible assets among others. Keywords: Digitalization, Multinational Corporations, Profit Shifting, Tax Avoidance, Transfer Pricing.

Business strategies and climate change adaptation: insights from a comparative study between a developed and a developing country

PurposeThe paper aims to investigate key aspects of climate change adaptation strategies of Multinational Corporations (MNCs) across two different climate-vulnerable country contexts, developed, i.e. Australia and developing, i.e. Bangladesh, while identifying the key factors affecting the formulation and implementation of such strategies.Design/methodology/approachThe research uses a qualitative research method using interviews and document analysis while considering distinctive factors manifest in Australia and Bangladesh and focussing on the agricultural seed business sector.FindingsThe research reveals that no specific pattern of adaptation strategies exists across MNCs. They either follow a proactive “deliberate” strategy or a reactive “emergent” strategy. MNCs also follow a distinct strategy, “subliminal”, i.e. unintended or inadvertent strategy, by following the “business as usual” approach.Practical implicationsIn recent years, many MNCs have started embracing strategies to reduce their negative environmental footprint but barely adopted any formal strategies to adapt to climate change impacts on their business operations. This study provides insights into the existing climate change adaptation strategies of MNCs, which could be beneficial for companies in better planning and implementing their existing as well as future climate change adaptation strategies.Originality/valueBased on a developed-developing country comparison and together with a novel focus on the agricultural seed business sector, the paper has used a variety of business strategies in providing insights and understanding of the status of MNC climate change adaptation strategies. The research has identified and coined the term, “subliminal” or unintended strategy as a new addition to the MNC adaptation strategy literature.

The Effect of Global Monetary Policy Changes on the Financial Strategy of International Companies

In the interconnected global economy, the financial strategies of international corporations play a crucial role in navigating the dynamic landscape shaped by various factors, including monetary policies set by central banks worldwide. This narrative explores the intricate interplay between global monetary policy changes and the financial strategies of multinational corporations, investigating how shifts in these policies reverberate across borders, impacting corporate decision-making, risk management, and performance. Over recent decades, significant transformations in monetary policy frameworks have occurred, driven by evolving economic paradigms, financial crises, and geopolitical dynamics. Central banks have deployed a range of tools, from conventional inflation targeting to unconventional measures like quantitative easing, to stabilize economies and stimulate growth. However, the effectiveness and unintended consequences of these policies transcend domestic boundaries, permeating the international financial system and shaping the strategic imperatives of multinational corporations. The impact of global monetary policy changes on international companies' financial strategies is substantial. U.S. monetary policy shocks notably affect foreign firms, especially those with extensive global production linkages and financial constraints. Financial globalization has made domestic financial conditions more vulnerable to external shocks, reinforcing the case for price stability as an optimal monetary rule. The volatility of foreign currency exchange rates significantly affects international budgeting, while multinationals with foreign involvement exhibit lower leverage ratios and rely more on short-term borrowing. One primary channel through which global monetary policy changes influence international companies is by altering financing costs and access to capital. Changes in interest rates and liquidity conditions affect borrowing costs for firms operating across borders, impacting investment decisions, capital allocation, and capital structure optimization. Additionally, these changes induce currency fluctuations and volatility, necessitating robust currency risk management strategies to safeguard revenues and mitigate exchange rate exposure. Furthermore, global monetary policy changes affect asset prices, financial markets, and investor sentiment, shaping the risk-return dynamics faced by international companies. Expansive monetary policies often fuel asset price inflation and influence investment strategies, while abrupt policy shifts can trigger market dislocations and liquidity constraints. Beyond financial markets, monetary policy changes influence macroeconomic variables, such as economic growth, inflation, and trade patterns, shaping international companies' operating environments and strategic decisions. In conclusion, the interconnectedness of global financial markets accentuates the importance of agility, flexibility, and strategic foresight for multinational corporations in navigating the impact of monetary policy changes on their financial strategies and overall performance.

Navigating wartime communications: multinational corporations in the Russia-Ukraine war

AbstractThis article explores the communication strategies of multinational corporations in response to the Russo-Ukrainian War and the public pressure to divest from the Russian domestic market. By content analyzing official statements from the top 50 revenue-generating multinational corporations in Russia, the article identifies patterns in corporate narratives about the war, their actions and concerns, and potential solutions. The findings reveal that most companies declare scaling down their presence in Russia while maintaining certain basic obligations, prioritizing employee safety, and expressing concerns about the global economy. While few explicitly condemn Russia's aggression, many adopt neutral language to avoid naming Russia as the aggressor. Corporations emphasize the importance of diplomacy, adherence to international law, and the pursuit of peace, but often avoid proposing concrete solutions. Despite variations across industries, countries of origin, and decisions to stay or leave Russia, the differences in statements were not significant. The uniformity of corporate statements and evidence that companies frequently do not follow their declared promises suggest potential “bluewashing” – making vague or false claims of social responsibility or anti-war stances to improve their public image. These findings emphasize the need for multinational corporations to develop sincere and original wartime communication strategies.

Information Systems Strategy for Multi-National Corporations: Towards an Operational Model and Action List

The development and implementation of information systems strategy in multi-national corporations (MNCs) faces particular challenges—cultural differences and variations in work values and practices across different countries, numerous technology landscapes and legacy issues, language and accounting particularities, and differing business models. This article builds upon the existing literature and in-depth interviews with eighteen industry practitioners employed in six MNCs to construct an operational model to address these challenges. The research design is based on an inductive, qualitative approach that develops an initial conceptual framework—derived from the literature—into an operational model, which is then applied and refined in a case study company. The final model consists of change components and process phases. Six change components are identified that drive and underpin IS strategy—business strategy, systems projects, technology infrastructure, process change, skills and competencies, and costs and benefits. Five core process phases are recognized—review, align, engage, execute, and control. The model is based on the interaction between these two dimensions—change components and process phases—and an action list is also developed to support the application of the model, which contributes to the theory and practice of information systems deployment in MNCs.

Strategies of Multinational Corporations in Emerging Markets in Indonesia

Purpose: The aim of the study was to examine the strategies of multinational corporations in emerging markets in Indonesia
 Methodology: The study adopted a desktop methodology. Desk research refers to secondary data or that which can be collected without fieldwork. Desk research is basically involved in collecting data from existing resources hence it is often considered a low cost technique as compared to field research, as the main cost is involved in executive’s time, telephone charges and directories. Thus, the study relied on already published studies, reports and statistics. This secondary data was easily accessed through the online journals and library
 Findings: Multinational corporations (MNCs) in Indonesia's emerging markets exhibit a preference for collaborative entry strategies, emphasizing joint ventures and strategic alliances. These approaches enable MNCs to harness local expertise and navigate the complexities of the Indonesian market effectively. Government policies play a pivotal role in shaping MNC strategies, with favorable policies attracting greater foreign investment and expansion. Industry-specific competitive strategies, including price competition, technology differentiation, and product innovation, are tailored to meet local market demands. Additionally, MNCs actively engage with the
 Unique Contribution to Theory, Practice and Policy: Eclectic paradigm (OLI Framework), Resource-based view (RBV) & Institutional theory may be used to anchor future studies on the examining the strategies of multinational corporations in emerging markets in Indonesia. Encourages MNCs to build meaningful partnerships, leveraging local expertise and networks, which can be crucial for navigating complex regulatory environments and market dynamics. Engaging in policy advocacy represents a proactive approach by MNCs to shape the regulatory landscape in their favor while contributing to the host country's economic development.

Research of the Development Strategies of Multinational Corporations in Emerging Markets

Emerging markets are significant target markets for a range of goods and services due to their large consumption potential. Yet, because of the general lack of market liquidity in emerging markets, the growth of multinational firms just so happens to increase market liquidity and draw in additional investors. Therefore, the development of multinational corporations plays a vital role in promoting the prosperity of emerging markets. This paper focuses on the development strategies of multinational corporations in emerging markets. Through searching and collecting the development process and relevant information and data of well-known old multinational corporations, this paper analyzed and compared them, and summed up three important strategies. It can be concluded that in order to make established multinationals play a bigger role in emerging markets and get more emerging market companies to become multinationals, there are three important strategies: stick to direct investment, create unique business models, and promote internationalization.

The New Typology and Evolution of Multinational Corporation Subunit Roles: An Explorative Study

This paper conducts an explorative study to examine the evolution of Multinational Corporation (MNC) subunit roles based on the characteristics of its competence creating (CC) activities. The study focuses on the heterogeneity of firm-specific evolutionary paths in the patterns of knowledge accumulation that support competence creating (CC) activities. Using continuous variables instead of creating categorization of subunit roles, we create a model to examine the strategic roles of MNC subunits, based upon the evolutionary trajectory of a subunit’s CC activities and its technological distance from its parent company. We identify and measure subunit CC intensity and subunit technological distance as the two determining dimensions that characterize an MNC subunit’s pattern of innovation in terms of competence-creating. The innovative activity was observed from large firms of the general chemical industry, with data that covers an over thirty-year window, to explore the characteristics of competence creation activities, and to examine the proposed typologies. Using the longitudinal observation, we further examine the evolution of MNC subunit roles based on the characteristics of their competence creating activities, and demonstrate several real world business examples of subunit typologies. This research makes both theoretical and methodological contributions to the literature of MNC innovation and subunit strategic roles by presenting a continuous model to examine competence-creating activities of MNC subunits. A connection between statistical data analysis and individual firm examples is made in the discussion of subunit evolutionary trajectories, which can lend itself to possibilities of in-depth case studies. Using the typology designed in this study, we can further examine the relationship between MNC strategy and subunit role evolution, using the continuous variables to describe a subunit’s innovative activities rather than categorizing subunits as a CC or CE type, which in turn allows for a more realistic understanding of MNC subunit behavior – as innovative firms should always have a combination of CC and CE innovations.

Loss expectation and income shifting

This study examines the effects of expected losses on the income-shifting strategies of multinational corporations (MNCs). Using a set of worldwide MNC affiliates, this study first finds empirical evidence for ex ante adjustments of income-shifting strategies according to reverse incentives for potential losses. The results also support the existence of limited flexibility introduced by Hopland et al. (2018, 2021). Second, the estimates of income shifting measured using expected tax rate differences reveal that the traditional methodology of using statutory tax rate differences is subject to an estimation bias. This estimation bias varies depending on the loss expectation status and tax-rate levels of the affiliates.

The Impact of Digitalization on Business Development Strategies of Multinational Corporations

The Impact of Digitalization on Business Development Strategies of Multinational Corporations

Strategy implementation in the transnational MNC: A critical realist investigation of European and Indian unit collaboration

Inter-unit collaboration in transnational multinational corporations (MNCs) is central to unlocking MNCs' competitive advantage. We find that managing multilevel interaction of macro-level (social structures within and outside the MNC) and micro-level (individual interpretations and behaviors) factors ensures the implementation of strategic goals regarding inter-unit collaboration. In a case study of Finnish, Russian, and Indian unit collaboration in one European-origin transnational MNC, we observe that individual ascriptions of social identity to Indian colleagues (micro-level factor) affect the MNC's strategy implementation (SI) process and outcomes (macro-level factors). Building on the latter observations, critical realist theory of identity, and the idiosyncratic Indian context, we develop the currently inadequate multilevel theorization on the SI process in the MNC and expand perspectives on social identity in International Business literature. For MNC managers from Western countries, the paper offers insights into factors that should be considered to succeed in strategic and operational inter-unit collaboration with India.

“A thread connects all beads”: Aligning global CSR strategy by hotel MNCs

Facing the global challenges of building a sustainable and equitable economy, hotel multinational corporations (MNCs) have leveraged their extensive global reach and business skills to guide local communities through the implementation of global corporate social responsibility (CSR) strategies. Our study explored the alignment of global CSR strategy by two hotel MNCs—Hilton Worldwide and Marriott International—using an institutional logics framework. Based on a two-country case study of China and Turkey, we uncover the mechanisms of implementation for alignment between MNC headquarters and affiliated hotels in host countries, where a plurality of logics interact and collide with the global CSR logic. We examine the dimensions of plurality of logics in the process of local implementation and unveil novel insights on logic reconciliation and activation to support systemic and transformative change through global CSR strategies of MNCs. We offer theoretical and practical implications and future research directions. • This study examined global integration of a CSR strategy in two hotel multinational corporations in China and Turkey. • Novel mechanisms enabled alignment between headquarters and local hotels for CSR in the context of a plurality of institutional logics. • Corporate logic dominated community and state logic in global strategic alignment of CSR. • Local implementation tensions and facilitators were identified for supporting headquarters mechanisms. • Hospitality logic facilitated strategic alignment, improving the potential of the MNCs to create awareness and impact.

A Closer Look at the Relationship Between Internationalization and CSR Disclosure Quality

Drawing on institutional theory, we investigate the effect of international diversification strategies of multinational corporations (MNCs) on CSR disclosure quality, the extent to which CSR reports reflect MNCs’ CSR activities. We propose that as international diversification increases institutional complexity, they respond differently to this complexity by lowering disclosure quality of environmental CSR yet improving disclosure quality of employee CSR. In addition, since decoupling CSR reporting from actual practices is risky, we examine how the cultural value of uncertainty avoidance in MNCs’ home country changes MNCs’ decoupling response to increasing complexity due to international diversification. Based on a sample of 335 global MNEs from 31 countries, we found general support for our hypotheses.

Political risk effects and entry mode strategies of multinational corporations (MNCS) in Nigeria

Research on the political risk and entry mode of multinational companies (MNCs) has been one of the major subjects of interest in international business terrain, and the political risk factor has constitute a major basis for explaining whether exporting, licensing, franchising, or joint venture agreement (JVA) and Foreign direct investment seems to be appropriate. As such, the study examined the effect of political risk as it affects the entry mode strategies of selected multinational corporations in Nigeria as the economy of most developing economies has been characterized as being exposed to political instability and risk. The research adopted the survey technique with inference to the expo facto method and adopted questionnaire as an instrument through content and test re-test appraisal before data were analyzed through the IBM Statistical Package for the Social Sciences. The results from the analysis indicated that franchising remains a viable option of multinationals in Nigeria and the second hypothesis indicated that licensing significantly reduces the risk exposure of multinational corporations as the licensor have lesser liability in an unstable political economy of the licensee. Based on these findings companies are recommended to adopt appropriate entry strategies in line with governmental policies and economic situation before entering foreign markets.
 JEL CODES: M1, M10

Dynamics and positioning strategies of multinational corporations in modern international production

The subject of the study is the dynamics of the development of the scale of the presence of transnational corporations (TNCs) in the foreign market, which have changed significantly at the present stage. This is partly due to the complexity of corporate structures and ownership structures, the specifics of their control over their foreign divisions. At the same time, the scaling of TNCs is also determined by the fragmentation of international production networks, their increasing role in global value chains of holding and financial companies operating in offshore investment centers. These aspects significantly affect the strategies of foreign direct investment of TNCs, the nature and dynamics of foreign direct investment (FDI), the concentration of income from these investments in offshore jurisdictions. The main conclusions of the study are the conclusion that the development of GCC has led to a significant fragmentation of international production, which has become a key strategic direction for the development of TNCs in recent years. At the same time, it is customary to distinguish between vertical and horizontal TNCs in the placement of international production. Vertical TNCs are characterized by the placement of production links in the least expensive countries, and such TNCs have become particularly important within the framework of the GCC system, which provides for a reduction in transaction costs of international production and coordination costs. Horizontal TNCs emerged earlier and preceded the formation of vertical TNCs, focusing on the market, bringing production closer to the consumer and, thus, reducing trade costs. It is noted that vertical TNCs have increasingly resorted to concluding contracts with independent partners abroad on the basis of licensing, franchising and contract production strategies. The final, most preferred variant of TNCs, which developed in the 1990s, were TNCs in the form of international production networks operating within the framework of the GCC.

Doing Business in Emerging Market Economies: Challenges and Success Strategies for Western Multinational Corporations

The purpose of this paper was to investigate and analyze the negative impact of emerging economies’ institutional challenges on western multinational corporations (MNCs) operating there. The content analysis methodology was used. The paper reveals that emerging markets’ institutional voids affect western MNCs in terms of cost of doing business, strategy development and overall competitiveness. The conclusions derived from the analysis is that despite emerging economies investment opportunities, rapid economic and demand growth, their competitive landscape can negatively impact western MNCs ability to succeed in these markets. This is due to imprudent policies and inadequate governance structures implemented by emerging market policymakers. The article begins with a brief introductory background of emerging economies. This is followed by objectives of the paper, research method, and the theoretical underpinnings for the motivations of western MNCs to pursue overseas markets in emerging economies. It then provides an analysis of the role and significance of emerging economies in the global economy. This is followed by a critical review of MNCs strategies in emerging markets, and effects of emerging market institutional challenges on MNCs. Then, the implications for MNCs competitiveness in emerging markets are examined. Finally, recommendations for success for both prospective and current MNCs doing business in emerging economies are explored.

The effect of foreign market knowledge on SME export performance: a study ofnon-traditional SMEs in Ghana

PurposeIt is well documented in the extant literature that knowledge plays a crucial role in small and medium enterprise (SME) internationalization. Exporting SMEs from developing economies faces many challenges, including lack of knowledge about institutions in foreign markets, inadequate knowledge about foreign institutions and limited internationalization knowledge (IK). However, research on the export performance of SMEs has thus far focused on the internationalization strategies of multinational corporations. This study aims to explore the effect of foreign market knowledge on SME export performance. The authors also assessed the moderating effect of employee absorptive capacity in the knowledge-performance nexus.Design/methodology/approachThe authors adopted a survey design to collect data from owners/managers of SMEs exporters in the Greater Accra region of Ghana. A total of 350 questionnaires were distributed based on convenience. Of this number, 257 usable responses were used in the final analysis. The authors tested the proposed model using partial least squares-structural equation modeling.FindingsThe findings show that the three types of foreign market knowledge tested in this study, namely, foreign institutional knowledge (FIK), foreign business knowledge and IK have positive and significant effects on SME exporters’ performance. It also shows that employees’ absorptive capacity affects the relationship between FIK and SME exporters’ performance.Originality/valueThe study demonstrates the types of knowledge relevant to SME export performance. The study further demonstrates the moderating effect of employee absorptive capacity on the relationship between knowledge and export performance. The study advances existing knowledge on SME performance, especially from an emerging economy context.