Showing papers on "Multinational corporation published in 1982"

Multinational enterprise and economic analysis

Abstract: The third edition of Multinational Enterprise and Economic Analysis surveys the contributions that economic analysis has made to our understanding of why multinational enterprises exist and what consequences they have for the workings of the national and international economies. It shows how economic analysis can explain multinationals' activity patterns and how economics can shed conceptual light on problems of business policies and managerial decisions arising in practice. It addresses the welfare problems arising from multinationals' activities and the logic of governments' preferences and choices in their dealings with multinationals. Suitable for researchers, graduates and upper-level undergraduates. The third edition of this highly accessible book incorporates the many additions to our knowledge of multinationals accumulated in research appearing in the past decade.

The multinational corporation and the law of uneven development

Abstract: We have been asked to look into the future toward the year 2000. This essay attempts to do so in terms of two laws of economic development: the Law of Increasing Firm Size and the Law of Uneven Development.1

Bargaining power of multinationals and host governments

Abstract: One of the outcomes of negotiation between multinationals and host governments in developing countries—the extent of foreign ownership of subsidiaries—is influenced by the bargaining power of the two parties. Foreign ownership, measured in various ways, appears to be affected by the level of technology of the multinational, the degree to which a multinational attempts to differentiate its products, the extent to which a subsidiary's output is exported to other parts of the multinational, the diversity of products offered by the multinational, and the extent of competition by other multinationals. The relationship between some of these variables and ownership is not a simple one. One variable that others have mentioned as probably affecting bargaining power—size of the investment in question—appears not to play a significant role in government policies toward ownership, but many large projects tend to be located in countries that have lenient ownership policies.

A Cross-Cultural Study of “Made in” Concepts

Abstract: Cross-cultural studies of the perceptions of countries of origin by industrial users have been few, but they are important because of their managerial implications for multinational firms. This study uses data obtained from American and French Directors of Purchasing of major industrial firms concerning their perceptions of 5 major “made in” concepts. After the data were corrected for response bias, results show both how the respondents perceive the “made in” concepts and the differences between the American and French perceptions.

New Theories of the Multinational Enterprise

Abstract: 1. Internalization and Non-Equity forms of International Involvement Alan M Rugman. 2. Transaction Costs and the Theory of the Multinational Enterprise Mark C Casson. 3. Mergers and the Theory of Foreign Direct Investment A Louis Calvet. 4. Conventional Theory and Unconventional Multinationals: Do New Forms of Multinational Enterprise Require New Theories? Ian H Giddy and Stephen Young. 5. The Eclectic Theory of the Multinational Enterprise and the International Hotel Industry John H Dunning and Matthew McQueen. 6. Regional Offices in Multinational Firms Robert E Grosse. 7. Industrial Co-operation, Joint Ventures and the MNE in Yugoslavia Peter F Cory. 8. Macroeconomic Theories of Foreign Direct Investment: An Assessment H Peter Gray. 9. Foreign Bank Entry into Japan and California Adrian E Tschoegl. 10. Multinational Food and Fish Corporations David P Rutenberg. 11. Inter-Industry Determinants of Foreign Direct Investments: A Canadian Perspective Robert F Owen. 12. Multinational Enterprises and Technology Transfer Richard E Caves. Bibliography. Notes on Contributors. Index of Names. Index of Subjects.

Context and Decision Making Autonomy in the Foreign Affiliates of U.S. Multinational Corporations1

Abstract: In a study of the autonomy of decision making in multinational corporations, 23 explanatory variables grouped in 11 dimensions were tested in 3 separate surveys conducted in France and in Mexico Degree of interchange of products among members, ownership, workflow integration, and size of the global group were found to be the main predictors of autonomy

The Monopolistic Advantages of Multinationals: Lessons from Foreign Investment in the U.S

Abstract: The ruling theory of the multinational corporation (MNC) posits that the possession of firm-specific 'ownership' or 'monopolistic' advantages is a sine qua non for a firm to produce in a foreign country.' There are many sorts of imperfections in factor and product markets which can give rise to monopolistic advantages, not all of which are necessarily conducive to overseas production. To give rise to multinational operations, the advantages must, first, provide an edge to the enterprise concerned not only over its rivals at home but also over potential investors in the host country (both local and from third countries). Second, they must be transferable overseas and be exploited most economically at the foreign location. And, third, they must be more profitably exploited by the enterprise itself than by licensing them to an independent firm. This paper is concerned mainly with the first component noted above: the nature of the net monopolistic advantages that give rise to MNCs in different industries. Empirical studies of this have used three approaches. The first, directly comparing multinational with other enterprises, has been relatively little employed, presumably because of data limitations.2 The other two have both relied on industry-level data to identify the characteristics of sectors which have a greater predominance of multinationals than others. One of these has examined the foreign investment propensities of industries in the capital exporting country, correlating these with the sources of monopolistic advantage suggested by industrial economics.3 The other has undertaken a similar exercise from the side of the capital importing economy, examining the characteristics of sectors which have greater MNC presence (usually measured by the share of industry sales accounted for by foreign enterprises) than others.4

Government Intervention in Less Developed Countries: The Experience of Multinational Companies

Abstract: It is a fact of international business that governments intervene in the operations of foreign direct investors. These government actions create a high level of uncertainty in international planning and are very costly to the foreign investor. It appears, however, that not all firms experience the same degree of intervention. Within almost all nations, the government appears to intervene in some foreign companies more than in others. At one extreme some firms are forced out of the nation, while at the other extreme firms tend to grow and prosper. The purpose of this paper is first, to explain these different experiences of foreign firms, and then to address the question: How can foreign firms reduce the amount of intervention they experience? The conclusions are based on the intervention histories of more than 100 firms.

Third World MultinationalsA Growing Force in International Relations

Abstract: This article examines the growth processes of multinational corporations based in Third World states. It is suggested that both ownership and location-specific factors explain the emergence of these firms. The main competitive strengths of these firms lie in their access to manufacturing technologies suitable to the conditions of the developing world: lower operating and overhead costs, familiarity with the business environment of Third World states, and their perceived less threatening nature. The article identifies their advantages and disadvantages to home and host states and indicates that these firms could become a significant factor in the international economic system.

Prescriptions for Death - The Drugging of the Third World

Abstract: The problem of whether or how to control drugs is of particular importance to the population of the 3rd world countries. More and more during the past few years there have been sweeping denunciations of multinational drug companies for dumping worthless or dangerous products in the 3rd world. This volume documents these charges of drug dumping i.e. selling to a developing country a drug which has been banned in the industrial world and reports on the campaigns to induce poor countries to squander their limited health care resources on unneeded tonics costly vitamin preparations and other luxury drugs. The 6 sections of the book cover the following: the patients; the drugs (sources of data antibiotics drugs against diarrhea pain and fever fighters anabolic hormones and tonics); the physicians pharmacists and other professionals; and the options for change (country of origin rule certification of imported drugs local production drug patients national formularies group purchase quality control 2 tier pricing labeling and promotion and a task for consumers). As far as the more than 500 drug products covered in the studies reported here there would appear to be no substantial differences in the performances of multinational companies domestic companies brand name companies generic name companies companies based in capitalistic nations and companies based in socialistic or communist bloc countries. On the basis of the products concerned in this analysis the 3rd world promotion and labeling presented by many firms based in the US and the UK cannot be accepted as adequately truthful complete and scientifically sound. It is the impression that US and British promotion is more responsible than that used by many multinational companies based in West Germany Switzerland and other industrialized nations and the promotion presented bydomestic firms based in the developing countries themselves. The results of irresponsible promotional practices in developing countries are tragic: the waste of scarce funds on luxury drugs; the failure to buy low cost generic products of high quality; drug shortages; and needless injury and death. The industry views itself as relatively free of any wrong doing but according to Halfdan Mahler Director General of the World Health Organization the activities of the multinational drug companies in the 3rd world can be termed "drug colonialism" as well as indecent. The International Federation of Pharmaceutical Manufacturers Associations Code of Pharmaceutical Marketing Practices is included in an appendix.

Public enterprise in less-developed countries: State-owned enterprise: an agent without a principal

Abstract: State-owned enterprises (SOEs) comprise a large and rapidly growing sector of the economy in the majority of countries in the world today. They have been established to achieve a broad array of public policy purposes in very diverse political and economic systems. Typically, they account for half or more of total government investment, and in 1978 the international borrowings alone of public-sector enterprises amounted to more than $30 billion, equal to the total foreign borrowings by central governments in the past year. As international exporters, importers, and investors, SOEs are helping to shape the emerging structure of trade and payments relations in the 1980s. Their presence outside their traditional domain of public utilities is being felt especially in natural-resource-based and modern high-technology industries with high barriers to entry, in which private multinational firms have heretofore taken the lead. They are moving into a dominating position also in senescent industries such as textiles, shipbuilding, and steel, where the government moved in to save present firms from going under. Yet despite the proliferation of SOEs since World War II, we actually know very little about the way they are managed. One reason for this lack of knowledge may be the tendency of economic theory to assume a perfect-market economy, in which firms passively transfer inputs procured in a perfect market into output sold in similar markets. Until recently, little attention has been paid to the problems and cost involved in managing an enterprise. By the same token, early socialist theoreticians saw the nationalization of production facilities as a way to achieve some equity and reduce “exploitation.”

Attitudes toward advertising: a multinational study

Abstract: Advertising is emerging as one of the most controversial functions of business. This study surveys an international sample of consumerists, students, academicians, and managers to determine differences in their attitudes toward advertising. The strongest differences exist between managers and consumerists.

How multinational organizations evolve

Abstract: When companies grow and expand overseas, they often experience such organizational problems as the classic conflict between line and staff and between country and functional managers. Often, the companies that succeed are those that take a gradual and adaptive approach rather than engaging in a series of abrupt and traumatic reorganizations.

A new approach to multinational social responsibility

Abstract: Multinational business activity has expanded dramatically since the end of World War II. The increased presence of foreign corporations and the generally strategic significance of such presence for host countries, has increasingly confronted both sides with the need to develop guidelines governing the conduct of such operations. The new voluntary approach to guideline development suggested here is based on the proposition that the fundamental aim of business activity is the satisfaction of socially desirable needs. Under this approach, MNC's should attempt to operate in a socially desirable manner in all countries of operations. Social desirability determination will be made on the basis of whether activities in particular countries will be seen, by majority concensus of all publics on which corporate activity impacts, to bring about welfare improvements in the countries concerned. Periodic public opinion polls, or more informal methods in the less developed countries, are seen to provide the necessary inputs for the development of overall corporate guidelines for action, which in turn will influence strategic corporate decisions. The long run benefits resulting from such conduct are seen to outweigh temporary gains that could accrue to corporations through the pursuit of profitable but socially undesirable activities.

Approaches to strategic planning for information resource management (IRM) in multinational corporations

Abstract: Multinational corporations (MNCs) face increasingly higher rewards and risks when choosing amongst alterative investments for their computer and communications based information systems. The multi-layered management and technical issues and decisions confronting multinational corporations are seemingly endless and require new insights. A rapidly growing number of MNCs are utilizing computer based information systems, office automation and administrative support systems, telecommunications systems, factory information systems, and home information systems as critical tools in managing and monitoring their global businesses. As the resources, scope, and criticality of the "information commodity" grow, more senior managers are being forced to concentrate on better ways of planning for rapid changes to capitalize on new opportunities and reduce their risks. The conclusions and recommendations presented in this article are based on an examination of the actual information resource management (IRM) planning and coordination practices of 25 large multinational corporations as well as an indepth review of two case studies.

The multinational corporation and the law of uneven development

Abstract: Publisher Summary This chapter focuses on the multinational corporation and the law of uneven development. The evolution of business enterprise from the small workshop to the Marshallian family firm represented only the first step in the development of business organization. Multinational corporations are torn in two directions. On the one hand, they must adapt to local circumstances in each country. This calls for decentralized decision making. On the other hand, they must coordinate their activities in various parts of the world and stimulate the flow of ideas from one part of their empire to another. This calls for centralized control. They must, therefore, develop an organizational structure to balance the need for coordination with the need for adaptation to a patch-work quilt of languages, laws, and customs. The government's ability to tax multinational corporations is limited by the ability of these corporations to manipulate transfer prices and to move their productive facilities to another country.

Capital Structure and the Financing of the Multinational Corporation: A Fractional Multiobjective Approach

Abstract: The financial manager of the multinational corporation (MNC) is faced with various tax structures, changing exchange rates, barriers to capital flows, and the possibility of financial market segmentation. The manager must be concerned with determining an optimal capital structure as well as identifying the sources of the relevant funds. Likewise, the manager must be concerned not only with funds flows, but also with the risk that the value of these flows will change owing to changing exchange rates. Finally, the manager must be concerned with operating under widely differing governmental philosophies.

Systems of Taxation of Multinational Firms under Exchange Risk

Abstract: The great stride of multinational firms during the last two decades has raised several problems in the home countries of such firms, notably in the United States. It is argued that the most serious problems are those of substitution of foreign production for exports of goods from the home countries, the negative impacts on the balance of trade of the home countries, and the possible losses of home tax revenues. These problems led to reconsideration of the system of taxation of multinational firms. One of the popular systems of taxation of foreign source income of multinational firms is the system of foreign tax credit with deferral allowed. Deferral means that profits of foreign subsidiaries of multinational firms are not taxed by the home governments until they are repatriated to the home countries. Even if repatriated profits (in the case of foreign branches all their profits) are subject to home taxation, tax credits are given by the amounts of taxes paid to the foreign countries. The tax credit system is adopted in major countries such as Japan, Sweden, the United Kingdom, the United States, and West Germany. Another method of taxation is the deduction system, under which foreign taxes paid are deducted from foreign profits taxable by home countries. It is partially adopted, for example, in Belgium and Italy (Kopits [14, 634]). Studies of the system of taxation in the United States have recently been made by Horst [9], Hartman [7], and Bergsten, Horst and Moran [4]. However, previous studies including the above three studies do not take into account exchange risk which is inevitable to multinational firms operating in different currency areas. Another shortcoming of the above three studies is that they focus only on the international investment decisions by multinational firms, and do not take into account the practice of international trade of goods and transfer pricing, which are typical features of most U.S. based multinational firms. This paper analyzes the system of taxation from new aspects, i.e., by incorporating