Bringing the firm back in: Multinationals in international political economy

Millennium - Journal of International Studies

Volumn 20, Issue 2, 1991, Pages 197-224

  Eden, Lorraine ^a  

^a CARLETON UNIVERSITY   (Canada)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 84970233683     PISSN: 03058298     EISSN: None     Source Type: Journal    
DOI: 10.1177/03058298910200021301     Document Type: Article

References (89)

1. Robert Gilpin, The Political Econamy of International Relations (Princeton, NJ: Princeton University Press, 1987), pp. 10-11.
2. Susan Strange, States and Markets: An Introduction to IPE (London: Pinter, 1988), p. 18
3. Roger Tooze ‘Perspectives and Theory: A Consumer's Guide’, in Susan Strange (ed.), Paths to International Political Economy (London: Allen and Unwin, 1984), p. 12.
4. See Susan Strange, ‘An Eclectic Approach’, in Craig Murphy and Roger Tooze (eds.), The New International Paditdcal Economy (Boulder, CO: Lynne Rienner 1991), pp. 40-49.
5. United Nations Center for Transnational Corporations (UNCTC), Transnational Corporations in World Development (New York: United Nations, 1988), Chapter 1.
6. For example, the following books cover multinationals in one chapter (Spero devotes two), but pay little attention to MNEs outside these pages: Robert Gill and David Law, The Global Political Economy: Perspectives, Problems and Policies (Baltimore, MD: Johns Hopkins University Press, 1988)
7. Robert Isaak, International Political Economy: Managing World Economic Change (Englewood Cliffs, NJ: Prentice Hall, 1991)
8. Joan Spero, The Politics of International Economic Relations 4th ed. (New York: St. Martins Press, 1990).
9. R.D. McKinley and R. Little, Global Problems and World Order (Madison, WI: University of Wisconsin Press, 1986)
10. For example, political scientists have historically used the term MNC. Economists tend to use MNE, arguing that all multinationals are enterprises but not all are incorporated. There may also be a regional bias, with American scholars using MNC and British scholars using MNE. UNCTAD and the UNCTC use the term TNC on the grounds that MNE or MNC implies multinational ownership whereas most multinationals are owned by residents of one country, according to Horst Heininger, ‘Transnational corporations and the Struggle for the Establishment of a New World Order’, in Alice Teichova, Maurice Levy-Leboyer, and Helga Nussbaum (eds.), Multinational Enterprise in Historical Perspective (Cambridge: Cambridge University Press, 1986).
11. The term new style MNEs is used by John Dunning, Explaining International Production (Boston, MA: Unwin Hyman, 1988), Chapter 13
12. Sylvia Ostry, Governments and Corporations in a Shrinking World: Trade and Innovation Policies in the United States, Europe, and Japan (New York: Council on Foreign Relations, 1990) refers to them as global corporations.
13. See Jeffery Frieden and David Lake (eds.), International Political Economy (New York: St. Martin's Press, 1987)
14. Robert Gilpin, ‘Three Models of the Future’, in C.F. Bergsten and L.B. Krause (eds.), World Politics and International Economics (Washington, D.C.: The Brookings Institution, 1975), Chapter 6.
15. David Leyton-Brown, ‘The Roles of the Multinational Enterprise in International Relations’ in David Haglund and Michael Hawes (eds.), World Politics, Interdependence and Dependence (Toronto: Harcourt, Brace, Javanovich, 1990)
16. Theodore Moran (ed.), Multinational Corporations: The Political Economy of Foreign Direct Investment, (Lexington, MA.: Lexington Books, 1985), Chapters 1, 7, 13
17. Robert T. Kurdle, ‘The Several Faces of the Multinational Corporation: Political Reaction and Policy Response’, in W. Ladd Holsti and F. LaMond Tullis (eds.), An International Political Economy (Boulder, CO.: Westview Press, 1985)
18. See all of the following by Raymond Vemon: ‘International Investment and International Trade in the Product Cycle’, Quarterly Journal of Economics (Vol. 80, No. 2, May 1966)
19. Sovereignty at Bay (Harmondsworth: Penguin Books, 1971)
20. Storm Over the Multinationals (Cambridge, MA: Harvard University Press, 1977)
21. ‘The Product Cycle Hypothesis in the New International Environment’, Oxford Bulletin of Economics and Statistics (Vol. 41, No. 4, Nov. 1979)
22. See Steven Hymer ‘The Multinational Corporation and the Law of Uneven Development’, in Jagdish Bhagwati (ed.), Economics and World Order (New York: McMillan, 1971)
23. ‘The International Division of Labour’ in R.B. Cohen, N. Felton, J. van Liere and M. Nkosi, (eds)., The Multinational Corporation: A Radical Approach, Papers by Stephen Herbert Hymer (Cambridge: Cambridge University Press, 1979).
24. On the differences between problem solving and critical theory see Robert Cox, ‘Social Forces: States and World Order’, Millennium Journal of International Studies (Vol. 10, No. 2, 1981), pp. 126-55.
25. Raymond Vernon and Debra Spar, Beyond Globalism: Remaking American Foreign Economic Policy (New York: Macmillan, 1990), pp. 109-39.
26. Steven J. Kobrin, ‘Testing the Bargaining Hypothesis in the Manufacturing Sector in Developing Countries’, International Organization (Vol. 41, 1987), p. 610.
27. See also Barbara Samuels, Managing Risk in Developing Countries (Princeton, NJ: Princeton University Press, 1990) Chapter 1 and the bibliography for an update.
28. The arguments are not developed in detail here. See, for example, Samir Amin, Unequal Development (Hassocks: Harvester, 1976)
29. Rhys Jenkins, TNCs and Uneven Development: The Internationalization of Capital and the Third World (London: Methuen, 1987)
30. Richard Newfarmer (ed.), Profits, Progress and Poverty (Notre Dame: University of Notre Dame Press, 1985).
31. see also Robert Cox, Production, Power and World Order: Social Forces in the Making of History (New York: Columbia University Press, 1987).
32. See James Caporaso (ed.), A Changing International Division of Labour (Boulder, CO: Lynne Reiner Publishers)
33. Chapter 1, for a theoretical overview of the literature on the international division of labour. Mark Casson, Multinationals and World Trade: Vertical Integration and the Division of Labour in World Industries (London: Allen and Unwin, 1986), Chapter 2, relates this literature to the economic theory of the vertically integrated MNE.
34. See Folker Froebel, Jurgen Heinrichs and Otto Kreye, ‘The World Market for Labour and the World Market for Industrial Sites’, Journal of Economic Issues (Vol. 12, No. 4, 1978), pp. 843-858
35. Kurt Hoffman and Raphael KapLinsky, Driving Force: The Global Restructuring of Technology, Labour and Investment in the Automobile and Components Industries (Boulder, CO: Westview Press, 1988).
36. John Dunning, ‘The Globalization of Firms and the Competitiveness of Countries’, in John Dunning, Bruce Kogut and Magnus Blomstrom (eds.), Globalization of Firms and Competitiveness of Nations (Crafoord Lectures, Lund: Lund University Institute of Economic Research, 1990).
37. Charles Kindleberger, American Business Abroad: Six Lectures on Direct Investment (New Haven, CT: Yale University Press, 1969).
38. The early work on the MNE as an actor was developed in Stephen Hymer's 1960 Doctoral dissertation, written under Charles Kindleberger. See Hymer, The International Operations of National Firms: A Study of Direct Investment (Ph.D. Thesis, MIT; published by MIT Press under the same title in 1976). Their works on oligopolistic motives for FDI are now known in IBS as the Hymer-Kindleberger approach.
39. Charles Kindleberger, ed. The International Corporation (Cambridge, Mass.: MIT Press, 1970)
40. Richard Caves, Multinational Enterprise and Economic Analysis (Cambridge, U.K.: Cambridge University Press, 1982).
41. Good summaries of the various theories can be found in John Cantwell, ‘A Survey of Theories of International Production’ (Mimeo: University of Reading Department of Economics, 1990)
42. For a short summary see John Dunning, ‘The Theory of International Production’, in Khosrow Fatemi (ed-), International Trade: Existing Problems and Prospective Solutions (New York: Taylor and Francis, 1989).
43. John Dunning, ‘The Study of International Business: A Plea for a More Interdisciplinary Approach’, Journal of International Business Studies (Fall, 1989), pp. 411-36 for current directions in IBS
44. Mark Casson, The Firm and the Market: Studies in Multinational Enterprise and the Scope of the Firm (Oxford: Basil Blackwell and Cambridge, Mass: MIT Press, 1987)
45. For an application of this model to the pharmaceutical industry see Lorraine Eden, ‘Pharmaceuticals in Canada: An Analysis of the Compulsory Licensing Debate’, in Alan Rugman (ed.). International Business in Canada: Strategies for Management (Toronto: Prentice Hall, 1989).
46. Farok Contractor and Peter Lorange, Cooperative Strategies in International Business (Lexington, Mass: Lexington Books, 1988)
47. Charles Oman, New Forms of Investment in Developing Countries: Mining, Petrochemicals, Automobiles, Textiles, Food (Paris: Development Centre of the OECD, 1990) document the growing nonequity linkages among MNEs.
48. Charles Kindleberger, ‘The “New” Multinationalization of Business’, ASEAN Economic Bulletin (November 1988), pp. 113-24, argues, however, that many of these so-called ‘new forms of international business’ are not new (e.g., joint ventures) and may not be efficiency based.
49. On international competitiveness strategies see Michael Porter: The Competitive Advantage of Nations (New York: The Free Press, 1990a)
50. ‘The Competitive Advantage of Nations’. Harvard Business Review (March-April, 1990b), pp. 73-93
51. Alan Rugman and Alain Verbeke, Global Corporate Strategy and Trade Policy (London and New York: Routledge, 1990).
52. See Lorraine Eden, ‘Multinational Responses to Trade and Technology Changes: Implications for Canada’, in Don McFetridge (ed.), Foreign Investment, Technology and Growth (Ottawa: Investment Canada, 1991)
53. Rob van Tulder and Gerd Junne, European Multinationals in Core Technologies (New York: John Wiley, 1988) on information technology and its potential impacts on MNE organisational and locational structures.
54. C.K. Prahalad and Gary Hamel, ‘The Core Competence of the Corporation’, Harvard Business Revfew (May-June 1990), pp. 78-91.
55. See Ian Giddy and Stephen Young, ‘Conventional Theory and Unconventional Multinationals: Do New Forms of Multinational Enterprise Require New Theories?’ in Alan Rugman (ed.) New Theories of the Multinational Enterprise (London: Croom Helm, 1982), pp. 55-78, on the ownership advantages of ‘nonconventional’ MNEs. They argue that multinationals from LDCs and small countries tend to rely more heavily on nonequity joint ventures, do not have innovation based advantages, and tend to be imitators, fast followers or niche players.
56. At a micro level, David Teece, ‘Profiting from Technological Innovation’, in David Teece (ed.) The Competitive Challenge: Strategies for Industrial Innovaiion and Renewal (Cambridge, Mass.: Ballinger Publishing, 1987), pp. 185-219, is most useful in identifying the roles of the initial innovator, the fast followers and the owners of specialised and co-specialised assets.
57. At a macro level, John Cantwell, Technological Innovation and Multinational Corporations (Oxford: Basil Blackwell, 1989)
58. Mark Casson, Enterprise and Competitiveness: A Systems View of International Business (Oxford: Clarendon Press, 1990) examines the economic and cultural determinants of firm performance, arguing that culture-specific transactions costs explain most performance differences. He examines the roles of the entrepreneur as a risk taker, problem solver and global scanner. Determinants of entrepreneurial culture are discussed, applied in case studies of the United States and Japan, and then extended to examine joint ventures and the impacts of MNEs on LDCs.
59. Alan Rugman, Don Lecraw and Lawrence Booth, International Business: Firm and Environment (Toronto: McGraw Hill, 1985), pp. 104-108.
60. Francois Chesnais, ‘Multinational Enterprises and the International Diffusion of Technology’, in Giovanni Dosi (eds.), Technical Change and Economic Theory (London and New York: Pinter Publishers, 1988).
61. Markets versus hierarchies theory, referred to as the new institutional economics, was recently linked to IPE in Beth Yarbrough and Robert Yarbrough, ‘International Institutions and the New Economics of Organization’, International Organization (Vol. 44, No. 2, Spring 1990), pp. 235-59.
62. For an application of the theory of governance to international regimes see Lorraine Eden and Fen Hampson, ‘Clubs are Trumps: Towards a Taxonomy of International Regimes’, CITIPS Working Paper 90-02 (Ottawa: Carleton University, 1990). It is interesting that the IPE literature sets up its polar cases as states versus markets, whereas the IBS literature uses markets versus hierarchies. In both sets of literature markets are the alternative to the primary unit of analysis.
63. Erin Anderson and Hubert Gatignon, ‘Modes of Foreign Entry: A Transactions Cost Analysis’, Journal of International Business Studies (Vol. 17, No.3, 1986), pp. 1-26.
64. Freidrich Schneider and Bruno Frey, ‘Economic and Political Determinants of Foreign Direct Investment’, World Development (Vol. 13, No.2, 1985), pp. 161-75.
65. One recent exception is a new book on government-business relations by Jack Behrman and Robert Grosse, International Business and Government: Issues and Institutions (Columbia, South Carolina: University of South Carolina Press, 1990).
66. See by Michael Porter, Competitive Strategy (New York: The Free Press, 1980), Competitive Advantage (New York: The Free Press, 1985)
67. Porter (ed). Competition in Global Industries (Cambridge, Mass.: Harvard Business School Press, 1986)
68. Porter, ‘Changing Patterns of International Competition’ in David Teece (ed.), The Competitive Challenge: Strategies for Industrial Innovation and Renewal (Cambridge, Mass: Ballinger Publishing Co., 1987)
69. See also Yves Doz, Strategic Management in Multinational Enterprises (Oxford: Pergamon Press, 1986)
70. Christopher Bartlett and Sumantra Ghoshal, Managing Across Borders (Boston: Harvard Business School Press, 1989).
71. Anant Negandhi and Arun Savara (eds.), International Strategic Management (Lexington, Mass: Lexington Books, 1989).
72. Mark Casson, ‘Transactions Costs and the Theory of the Multinational Enterprise’, in Alan Rugman (ed.), New Theories of the Multinational Enterprise (London and Canberra: Croom Helm, 1982)
73. Nigel Grimwade, International Trade: New Patterns of Trade, Production and Investment (London and New York: Routledge, 1989).
74. Lorraine Eden, ‘The Microeconomics of Transfer Pricing’, in Alan Rugman and Lorraine Eden (eds.), Multinationals and Transfer Pricing Management (London and New York: Croom Helm and St. Martins Press, 1985).
75. Stefan H. Robock and Kenneth Simmonds, International Business and Multinational Enterprises (Homewood and Boston: Irwin, 1989), p. 253.
76. Peter F. Drucker, ‘The Coming of the New Organization’, Harvard Business Review (Jan.-Feb. 1988), pp. 45-63.
77. Gary Gereffi, in ‘International Subcontracting and Global Capitalism: Reshaping the Pacific Rim’, presented at the PEWS conference on Pacific-Asia and the Future of the World System, University of Hawaii at Manoa, March 28-30, 1991, refers to offshores as ‘export processors’ and source factories as ‘component suppliers’, pp. 5-8.
78. Kasra Ferdows, ‘Mapping International Factory Networks’, in Kasra Ferdows (ed.), Managing International Manufacturing (Amsterdam: North Holland, 1989).
79. Lynne K. Mytelka, ‘Knowledge-Intensive Production and the Changing Intemationalizatio n Strategies of Multinational Firms’, in James Caporaso (ed.), A Changing International Division of Labour (Boulder, CO: Lynne Reinner).
80. Investment Canada, ‘The Business Implications of Globalization’, Investment Canada Working Paper Series, No. 1990-V.(Ottawa: Government of Canada. 1990)
81. OECD, Structure and Organization of Multinationals (Geneva: OECD, 1987)
82. Investment Canada, ‘International Investment: Canadian Developments in a Global Context’, Investment Canada Working Paper 1990-VI (Updated) (Ottawa: Investment Canada, 1991)
83. Helen Milner, Resisting Protectionism: Global Industries and the Politics of International Trade (Princeton, NJ: Princeton University Press, 1988)
84. Helen Milner and David Yoffie, ‘Between Free Trade and Protectionism: Strategic Trade and a Theory of Corporate Trade Demands’, International Organization (Vol. 43, No. 2, Spring 1989), pp. 239-72. One obvious example of this change is the Exon- Florio amendment which requires the Committee on Foreign Investment in the United States (CFIUS) to review large inward FDI projects for their national security effects- The CFIUS has been around for some time, but that its functions have been and are likely to be increased, partly to monitor Japanese takeovers of US firms. Another interesting question arises as to whether Japanese and European states will attempt to apply extraterritoriality to affiliates in the United States.
85. Benjamin Cohen, ‘The Political Economy of International Trade’, International Organization (Vol. 44, No. 2, Spring 1990), pp. 261-81
86. David Richardson, ‘The Political Economy of Strategic Trade Policy’, International Organization (Vol. 44, No.1, Winter, 1990), p. 107-35.
87. Magnus Blomstrom, Transnational Corporations and Manufacturing Exports from Developing Countries (New York: United Nations, 1990)
88. James Womack, Daniel Jones and Daniel Roos, The Machine that Changed the World (New York: Rawson Associates, 1990.
89. Peter Evans, Dietrich Rueschemeyer and Theda Skocpol, ‘On the Road to a More Adequate Understanding of the State’, in Evans (eds.), Bringing the State Back In (Cambridge: Cambridge University Press, 1985), p. 363.