Showing papers on "Multinational corporation published in 1981"

International production and the multinational enterprise

Abstract: Part 1: 1. The Distinctive Nature of the Multinational Enterprise. 2. Trade, Location of Economic Activity and the Multinational Enterprise: A Search for an Eclectic Approach. 3. Trade, Location of Economic Activity and the Multinational Enterprise: Some Empirical Tests. 4. Explaining Changing Patterns of International Production: In Support of the Eclectic Theory. 5. Explaining the International Direct Investment Position of Countries: Towards a Dynamic or Developmental Approach. 6. The UK's International Direct Investment Position in the Mid-1970s. Part 2: 7. Multinational Enterprises, Market Structure, Economic Power and Industrial Policy. 8. Multinational Enterprises and Domestic Capital Formation. 9. Multinational Enterprises, Locational Strategies and Regional Development. 10. Employee Compensation in US Multinationals and Indigenous Firms: An Exploratory Micro/Macro Analysis. 11. Multinational Enterprises and Trade Flows of Developing Countries. 12. The Consequences of International Transfer of Technology by Multinational Enterprises. Some Home Country Implications. Part 3: 13. Evaluating the Costs and Benefits of Multinational Enterprises to Host Countries: A 'Tool Kit' Approach. 14. Alternative Policy Prescriptions and the Multinational Enterprise. 15. Multinational Enterprises and the Challenge of the 1980s. Index.

Dependent Development: The Alliance of Multinational, State and Local Capital in Brazil.

Abstract: In order to analyze Brazil's recent accumulation of capital in the light of its continued dependence, Peter Evans focuses on the relationships among multinational corporations, local private entrepreneurs, and state-owned enterprises that have developed in Brazil over the last decade. He argues that while relations among the three kinds of capital continue to be contradictory, a triple alliance has been formed that provides the social structural basis for the pattern of local industrialization that has emerged. The author begins with a review of the theories of imperialism and dependency in the third world. Placing the Brazilian experience of the last twenty years in its historical context, he traces the country's evolution from the period of \"classic dependence\" at the turn of the century to the current stage of \"dependent development.\" In conclusion, Professor Evans discusses the implications of the Brazilian model for other third world countries. Examining the nature of the triple alliance as it is manifested in such industries as pharmaceuticals, textiles, and petrochemicals, the author reveals the complex differentiation of the groups' roles in industrialization and lays bare the grounds for their collaboration and their conflict. He consequently shows how the differing interests, power, and capabilities of the three groups have combined to produce a system promoting industrialization that benefits the elite partnership but excludes the larger population from the rewards of growth.

The Market for Know-How and the Efficient International Transfer of Technology

Abstract: This article explores the nature of international technology transfer and the operation of the market for know-how. It begins by examining the relationship between codification and transfer costs and then analyzes various imperfections in the market for know-how. The special properties of know-how are shown to confound various aspects of the exchange process when arms-length contracting is involved. The internalization of the exchange process within multinational firms serves to bypass many of these difficulties, and explains why the multinational firm is of such importance. Several forms of regulation of technology imports and exports are examined. It is discovered that the process is insufficiently well understood to permit the design of effective regulation that, moreover, appears unlikely to eliminate inefficiency. An efficiency focus is maintained throughout since I feel no qualification to pontificate on complex and confused distributional issues.

The Effects of International Operations on the Market Value of the Firm: Theory and Evidence

Abstract: THIS PAPER INVESTIGATES the existence of monopoly rents associated with international operations in a market-value theoretic framework. The benefits of international operations evolve from such factors as (1) imperfections in the product and factor markets, (2) differential international taxation, and (3) imperfections in the financial markets. In this paper, these factors are subject to an equilibrium analysis in the context of recent advances in financial theory. In particular, imperfections in the financial sector arising from corporate international diversification are examined in a framework which allows (a) supply adjustments by multinational firms and (b) the interaction of barriers to international capital flows faced by both firms and investors. Taking the U.S. capital market and investors as a base, we then specify the conditions under which the foregoing imperfections get "priced out" in an equilibrium. These pricing effects cannot be detected empirically through the methodologies employed by the existing studies which examine the effects of corporate international diversification. Indeed, it was an attempt to rescue the limitations of these studies which initially motivated our paper. The existing empirical inquiries into this area rely on traditional risk-adjusted performance measures (e.g., [7]) or international analogs of return generating processes (e.g., [1, 8]). Instead, at the empirical level, we employ a "value-based" method which is in the same vein of the Thomadakis [17] approach developed to identify the monopoly benefits of industrial market structure. We conduct the tests over subperiods characterized by differential government controls in an attempt (a) to separate the pure financial motives for multinationality from other motives, and (b) to detect if the benefits of international operations carry through recent periods.

A synthesis of foreign direct investment theories and theories of the multinational firm

Abstract: This paper first presents a taxonomy of the foreign direct investment theories following the market imperfections paradigm. It then focuses on recent developments pertaining to the theory of the multinational firm, specifically the appropriability, internalization, and diversification theories. Subsequently, the multinational phenomenon is seen as the result of an international differentiation of activities and an intrafirm integration across national borders – all this within a markets and hierarchies approach. Last, the paper points to areas for future research.

Global Competitive Pressures and Host Country Demands: Managing Tensions in MNCs

Abstract: Much has been written about the growing complexity of strategic demands facing multinational corporations. The authors examine conflicts implicit in the recent development of several such demands, and look at some of their administrative and organizational implications. In illustrating the administrative adaptations made by several companies, the authors highlight the need for change on a broader basis than the continual reorganizations resorted to by many MNCs.

The multinational bank: A financial MNC?

Abstract: The theory of non-financial multinational corporations is applied to the multinational commercial bank. The incentives toward multinationality that characterize the expansion of non-financial firms have their counterparts in multinational banks. The theory of the MNC provides a useful basis for the development of a theory of the multinational bank when the subsidiary offices operate in foreign financial markets. When banks' foreign subsidiaries operate in supranational markets (such as the Eurocurrency markets), there is little or no equivalence because the multinational banks compete only among themselves: there is no competition with indigenous firms. The supranational markets give rise to a distinct type of subsidiary. These banking offices and the markets in which they operate serve to integrate national capital and money markets with some possible endangerment to the stability of the international financial system.

The eclectic theory of international production: A case study of the international hotel industry

Abstract: This paper presents comprehensive data on the growth, structure and forms of involvement of multinational enterprises in the international hotel industry, and uses this data to provide empirical support for the eclectic theory of international production. Our understanding of the international hotel industry is that the ownership of a hotel often has the characteristics of portfolio investment and that the owners may have little knowledge of hotel operations. In these circumstances they will invariably employ a professional management company to run the hotel under a long term contract providing them with full control over the operation of the hotel. A particular feature of this paper is therefore to distinguish between, what we term, ‘equity-based control’ and ‘contract-based control’ of the enterprise and to point out the implications of this distinction for the analysis of the multinational enterprise.

Organization and evolution of foreign R&D in Swedish multinationals

Abstract: Although sheer size and geographical diversification may in time create new types of competitive economic advantages, most multinationals remain dependent on an efficient supply of new technology to maintain competitive strength. As a growing literature indicates, the manner in which multinationals organize and perform the task of technological renewal is a matter of considerable interest not only to corporate planners, but also to policy-makers and host countries.

Dependent Industrialization in the World Economy Some Comments and Results Concerning a Recent Debate

Abstract: Recent cross-national studies that analyze the impact of multinational corporations in the world economy on economic growth and inequality in peripheral and core countries have been interpreted as ...

A test of internalization theory

Abstract: In a world system of natural and government induced market imperfections we have observed the development of the multinational enterprise as an efficient organizational response. The internal market of the multinational enterprise is the mechanism for the generation and use of its firm specific advantage. When this knowledge advantage has been fostered by Research and Development the multinational enterprise seeks to avoid its dissipation and generally prefers centralized control. This paper examines the implications of internalization theory for the Research and Development function. It tests for significant differences in Research and Development performed by parent, subsidiary and independent firms of similar size, using Canada as a case study.

Research and Development by Multinational and Domestic Firms in Canada

Abstract: This paper presents both theoretical and empirical support for the proposition that less R & D is done in the branch plants of multinational enterprises in Canada than in either the parent multinationals, or in independent Canadian firms of similar size to the subsidiaries. The theory of internalization predicts that the multinational enterprise will concentrate its initial and ongoing R & D in the parent firm. It does this to protect its knowledge advantage from the risk of dissipation and it uses an internal market to control and monitor the use of its firm specific advantage. The empirical work surveyed, and new studies reported, support this interpretation of its global strategy.

Corporate Exchange Risk Management: Theme and Aberrations

Abstract: FOR ALMOST A DECADE, commencing with the Nixon devaluation in late 1971, controversy has surrounded the role of the U.S. multinational corporations (MNC's) vis a vis the exchange position of the dollar. Arguments range from whether the firms can affect exchange rates, whether they have affected exchange rates, to whether one should care if they do affect exchange rates. In this paper, I will briefly summarize a continuing study involving both extensive and repeated interviews with the chief international financial officers of major U.S. MNC's and the evaluation of financial data regarding the foreign exchange (FX) positions of the firms. Then, I will focus on the firms during five "crisis" periods in the foreign exchange markets, investigating whether the firms' currency levels and changes in those levels for various currencies can be seen as reinforcing or smoothing exchange rate fluctuations.

The Multinational Motor Industry

Abstract: List of Tables. Preface. Part 1: Economics and the Multinational Enterprise. 1. The Nature of the Multinational Enterprise. 2. Economic Theory and the Multinational Enterprise. 3. The Nation-state and the Multinational Enterprise. Part 2: Growth and Development. 4. The Beginnings. 5. The Interwar Period. 6. War and the Multinational Enterprise. 7. The Great Postwar Boom 1946-1973. 8. Recession and Recovery. 9. Multinational Enterprises and Communist Countries. 10. Labour's Response to the Multinational Enterprise. 11. Survivors. Part 3: Motor Industry Case Studies. 12. Conditions of Production. 13. Mature Developed Countries. 14. Rich Developing Countries. 15. Poor Developing Countries. Conclusions. Bibliography. Index.

Multinational collective bargaining attempts : the record, the cases, and the prospects

Abstract: ler Board, 1980 may one day be regarded as the year of the first significant symbolic step toward the democratization of corporate governance in the United States. In a provocative conclusion on the prospects for industrial democracy, King and van de Vall argue cogently that underlying social and economic conditions favor its development. They point out, as have others, that economic crisis has often triggered demands for wider worker participation; that the changing demographics of the work force-younger, more highly educated workers-also suggest it; and that the search for meaning and self-actualization in work-a persistent theme in the West-is increasing worker involvement on the job. Finally, they observe, the extension of democracy from political to economic institutions eems to be an almost natural and logical development of the democratic idea. While obviously sympathetic to the underlying idea of industrial democracy, the authors take a nonsectarian, nonideological approach to their topic. Although the subject lends itself to polemics, the authors remain detached in their discussion of three contemporary models of industrial democracy: joint consultation in England, workers' management in Yugoslavia, and codetermination in the West German coal and steel industries. The authors briefly discuss the historical origins of each system, and then move to a systematic presentation of the formal organization and structure of each model. The book begins with a brief (perhaps too superficial) sketch of the 19th and early 20th century intellectual antecedents of industrial democracy-utopian socialism, Marxism, Fabian socialism, and Guild socialism. Then the authors move to an analysis and comparison of the three models they have chosen. The presentation of each model is thorough and well organized, but there is a somewhat dated quality to the discussion. Although the book was published in 1978, the authors were apparently unable to incorporate into their discussion significant changes that occurred in each of these countries in the mid-1970s: the re-invigoration of the British debate on industrial democracy with the TUC resolution to put union members on company boards and the controversial Bullock Report that recommended a move toward the codetermination model; constitutional changes in Yugoslav workers' management in 1976; and an expanded codetermination law in West Germany in 1976. Moreover, some of the sources used in the book are aging quickly. Any book written about a fast-moving subject, however, is bound to be a bit out of date by the time it appears. One might also quibble with the authors' choice of models for analysis, especially joint consultation, which is, after all, toothless and moribund and about which much has already been written. Whatever it may be, joint consultation is not on the frontier of experiments in industrial democracy, and the authors basically recognize this. Much more interesting, it seems to me, are recent innovations in workers' management and ownership in Scandinavia. In the United States and England, proposals for union involvement in management have always raised the cry that in an adversarial industrial relations system, trade union participation in management creates an inevitable conflict of interest. In that respect, the wide-ranging ownership and management activities of the Israeli Histadrut is a fascinating and too-little-understood experiment and one that deserves wider attention. After analyzing the three models of industrial democracy, the authors devote much of the remainder of the book to comparing (ranking and assessing) them in terms of \"theoretically derived variables,\" which take the form of elaborate conceptual typologies. The authors discuss trends and problems common to all three systems (such as overcoming worker apathy and maintaining channels of communication) and, as has been done elsewhere, construct typologies by which the scope and extent of workers' power can be measured. King and van de Vall generally share the view held by some (Hugh Clegg and Milton Derber, for example) that collective bargaining per se is a form of industrial democracy. More radical exponents of industrial democracy say that equating collective bargaining with industrial democracy serves basically as a conservative ploy to defend the industrial relations status quo. \"You want industrial democracy? You've got it,\" they seem to say, like the Wizard of Oz who tells his travel-weary supplicants that they already have what they have come looking for. Despite some shortcomings, King and van de Vall's volume provides a good introduction to some of the major forms and issues in the dynamic field of industrial democracy. Paul Blumberg Professor Department of Sociology Queens College New York

The Appropriability Theory of the Multinational Corporation

Abstract: The appropriability theory of the multinational corporation emphasizes the conflict between innovators and emulators of new technologies. Appropriability is "high," and innovators can protect their profits more easily for sophisticated technologies and on breakthroughs that can be transmitted worldwide through the innovator's own subsidiaries. Conversely, appropriability is "low," and multinationals find it less profitable to create simple technologies and ideas that require market transfer. This theory explains the limited role multinationals have played in the development of simple products and simple production technologies, both of which are important to the developing countries. The appropriability theory also predicts that products in Vernon's product cycle will move to stage II when developed countries start successful emulation of the product and to stage III when developing countries start successful emulation. The profit-maximizing price strategy an innovating multinational should follow is to s...

Market servicing by multinational manufacturing firms: Exporting versus foreign production

Abstract: The foreign market servicing behaviour of multinational manufacturing firms evolves over time as a result of the firms' reaction to internal and external pressures. The interplay of immobile ‘location factors’ with internal ‘ownership factors’ under the control of individual enterprises exercises a powerful influence on the choice between exporting and foreign investment. Plant economies of scale encourage exporting, whilst firm level economies of scale, such as the internalization of the fruits of research, may predispose the firm towards foreign investment. Socio-political and cultural elements arising particularly from the nationality of ownership of the firm also influence market servicing strategy.

The incorporation of management development in strategic management

Abstract: In view of the increasing demands on managers and the corresponding scarcity of managers of high quality, management planning and development begins to emerge as one of the most important management techniques. In this paper, the authors advocate a procedure which incorporates the establishment of dynamic function profiles (based on the future function requirements) and dynamic manager profiles (based on the likely and desired development of the managers). The future gap in the quality and quantity of the company's management is found by comparing the two sets of profiles. The description of this gap is the basis for recruitments and other MPD actions. The procedure is closely synchronized with the strategic planning procedure and can therefore be considered as part of the strategic management concept. Experiences with the procedure in a multinational company show that it can be successful provided that the system is open to the managers and non-bureaucratic. Furthermore, it should not affect the normal powers of line managers with respect to their team formation. Despite all the attention it attracts, management planning and development (MPD) is still an underutilized management tool in many companies. Procedures are often either lacking or too bureaucratic. Reasons for this are the inherent limitations to planning with human beings and, on the other hand, the availability of a safety net in the form of a market of managers.

Background Concepts and Philosophy of International Business from World War II to the present

Abstract: Since World War II international business has moved through three general episodes and now stands on the threshold of a fourth. These episodes are defined by the number of actors relevant to corporation decision making. The immediate postwar decade is characterized as a two-actor era – the firm itself and its overseas commercial associates. During the so-called growth years, of 1955 to 1970, increasingly the political impact of, and the political response to, corporate strategy entered the decision-making calculus. During the 1970s, the “time of trouble,” the parent governments became increasingly active. The new international order which began appearing around 1980 introduced the multi-actor era in which a wide variety of international organizations and interest groups became relevant to corporate decision making, thereby introducing a new degree of uncertainty. Generally, academic research and teaching have lagged the reality. Even now, much attention is focused on the multinational corporation, a special form of international business organization which appeared during the 1950s and 60s and which now may be giving way to the international service and trading companies. The conclusion is that little research is being done on the internal dynamics of international business.

Recent Research on Multinational Corporations

Abstract: Prognostications that the multinational corporation (MNC) will succeed the nation state as the dominant social institution of our time are no longer as fashionable as they were in the mid-1960s. The nation state has proved more resilient than some earlier observers believed (Ball 1967), and MNC growth rates have retreated from the fantastic levels of the 1960s (Goodman 1980b). As the mystique recedes, it is easier to see MNCs for what they are: not magical new forms of social organization, but simply large, capitalist firms that have surmounted the constraints of operating in a single political entity and begun to produce and sell in several different nation states. Even viewed with deliberate dispassion, however, the MNC remains an institution with immense economic power, pervasive social and cultural effects, and serious political implications for rich and poor countries alike. Given its practical and theoretical importance, it is not surprising that the MNC has been the object of intense study for the past two decades and that a diverse literature has grown up analyzing the MNC from a variety of disciplinary and theoretical perspectives. What is surprising is the relatively marginal contribution of sociologists to that literature. In

Domestic employment effects of direct investment abroad by two Swedish multinationals

Abstract: Working paper analysing employment effects of Swedish multinational enterprises abroad on the metalworking industry in Sweden - considers market shares, size of enterprise, competition strategies, type of foreign linkage, etc., And concludes that some additional production employment gains could have resulted if alternative export sales linkage had been chosen instead of establishing manufacturing subsidiaries.