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22. Economic Sentiment Indicators and Foreign Direct Investment: Empirical Evidence from European Union Countries
- Author:
- Andrzej Cieślik and Mahdi Ghodsi
- Publication Date:
- 07-2021
- Content Type:
- Working Paper
- Institution:
- The Vienna Institute for International Economic Studies (WIIW)
- Abstract:
- This paper studies the role of business sentiment in the decisions of multinational enterprises (MNEs) to undertake foreign direct investment (FDI) across European Union (EU) member states. Based on the knowledge-capital model, the study employs the Pseudo Poisson Maximum Likelihood (PPML) estimator and panel data to examine empirically the determinants of FDI across EU member states during the period 2003-2017. The empirical evidence suggests that better economic sentiment in an EU Member State induces MNEs to undertake FDI in that country, while worse economic sentiment in an EU member state motivates an MNE in that country to invest abroad.
- Topic:
- Economics, Markets, Foreign Direct Investment, European Union, Business, and Multinational Corporations
- Political Geography:
- Europe
23. Firm Foundations: The Statistical Footprint of Multinational Corporations as a Problem for Political Economy
- Author:
- Timur Ergen, Sebastian Kohl, and Benjamin Braun
- Publication Date:
- 11-2021
- Content Type:
- Working Paper
- Institution:
- Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
- Abstract:
- The discipline of comparative political economy (CPE) relies heavily on aggregate, country- level economic indicators. However, the practices of multinational corporations have increasingly undermined this approach to measurement. The problem of indicator drift is well-documented by a growing critical literature and calls for systematic methodological attention in CPE. We present the case for a rocky but ultimately rewarding middle road between indicator fatalism and indicator faith. We illustrate our argument by examining two important cases – Sweden’s recent export success and the financialization of non-financial corporations in France. A careful parsing of the data suggests corrections to common characterizations of the two cases. Swedish exports have been reshaped by intragroup trade among foreign subsidiaries of domestic corporations. The growth of financial assets held by French firms is attributable to the growth of foreign direct investment and to cumulative revaluation effects, while what remains of financialization is concentrated among the very largest firms. Based on these findings, we propose a methodological routine that parses data by zooming in on the qualitative specifics of countries, sectors, and firms, while using all available options for disaggregation.
- Topic:
- Political Economy, Economic Growth, Multinational Corporations, and Financialisation
- Political Geography:
- Europe, France, and Sweden
24. Growth Models and the Footprint of Transnational Capital
- Author:
- Patrick Kaczmarczyk
- Publication Date:
- 06-2020
- Content Type:
- Research Paper
- Institution:
- Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
- Abstract:
- The definition of various growth models is the latest innovation of comparative capitalism (CC) research. Yet, the literature has its weaknesses in explaining the dynamics within and the interdependencies between different growth models. I argue that this weakness stems inter alia from an inadequate conceptualization of transnational corporations (TNCs). I provide empirical evidence on the footprint of international capital in the global economy and outline how including TNCs as a unit of analysis can help us to better understand economic outcomes. This leads to several implications for the growth models literature, which I conclude my argument with.
- Topic:
- Economics, International Political Economy, Global Political Economy, Economic Growth, Transnational Actors, Multinational Corporations, and Macroeconomics
- Political Geography:
- Global Focus
25. Through the Looking Glass: Corporate Actors and Environmental Harm Beyond the ILC
- Author:
- Daniella Dam-de Jong and Saskia Wolters
- Publication Date:
- 07-2020
- Content Type:
- Journal Article
- Journal:
- The Goettingen Journal of International Law
- Institution:
- The Goettingen Journal of International Law
- Abstract:
- Corporate activities take place in a variety of social contexts, including in countries affected by armed conflict. Whether corporations are physically present in these regions or merely do business with partners from conflict zones, there is an increased risk that their activities contribute to egregious human rights abuses or serious environmental harm. This is especially so for corporations active in or relying on the extractives sector. It is against this background that the ILC included two principles addressing corporate responsibility for environmental harm in its Draft Principles on the protection of the environment in relation to armed conflict. Both principles explicitly call on the home States of these corporations to give effect to their complementary role in regulating and enforcing corporate social responsibility. Draft Principle 10 addresses the responsibility of home States to regulate multinational corporations under the heading of “corporate due diligence”, while Draft Principle 11 addresses the responsibility of home States to hold multinational corporations liable for environmental damage caused in conflict zones. The current contribution engages with the potential normative foundations underpinning extraterritorial responsibilities for the home States of multinational corporations with respect to the prevention and remediation of environmental harm in conflict zones, focusing on international humanitarian law and international human rights law. It concludes that the Draft Principles are certainly indicative of the direction in which the law is evolving, but that no firm obligations beyond treaty law can be discerned as of yet. It was therefore a wise decision to phrase the respective Draft Principles as recommendations instead of obligations. At the same time, there are sufficient indications to conclude that it seems a matter of time before it is accepted that States have distinct obligations under customary international law for which their responsibility may be engaged. It is argued that the ILC Draft Principles provide an important impetus to these developments, not in the least because they provide a reference to States regarding the state-of-the-art and guidance for future action.
- Topic:
- International Law, Conflict, and Multinational Corporations
- Political Geography:
- Global Focus
26. Global giants and local stars: How changes in brand ownership affect competition
- Author:
- Vanessa Alviarez, Keith Head, and Thierry Mayer
- Publication Date:
- 11-2020
- Content Type:
- Working Paper
- Institution:
- Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
- Abstract:
- We assess the consequences for consumers in 76 countries of multinational acquisitions in beer and spirits. Outcomes depend on how changes in ownership affect markups versus efficiency. We find that owner fixed effects contribute very little to the performance of brands. On average, foreign ownership tends to raise costs and lower appeal. Using the estimated model, we simulate the consequences of counterfactual national merger regulation. The US beer price index would have been 4-7% higher without divestitures. Up to 30% savings could have been obtained in Latin America by emulating the pro-competition policies of the US and EU.
- Topic:
- Economics, International Political Economy, and Multinational Corporations
- Political Geography:
- United States, United Kingdom, Latin America, and Global Focus
27. The Economic Effects of Multinational Corporation Withdrawal and Policy Implications
- Author:
- Minsoo Han, Hyuk-Hwang Kim, Hyelin Choi, Danbee Park, and Jisu Kim
- Publication Date:
- 03-2020
- Content Type:
- Policy Brief
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- The shutdown of the GM Koreas Gunsan plant in May 2018 heightened social interest in the withdrawal of mutlinational corporations (MNCs). Against this backdrop, the forthcoming research The economic effects of multinational corporation withdrawal and policy responses studies the previous cases of MNC withdrawal, estimates the effects on labor market., and provides policy directions to address to the withdrawal. This note summarizes some of its important results.
- Topic:
- International Trade and Finance, Economy, Multinational Corporations, and Economic Policy
- Political Geography:
- Asia and Korea
28. Business Ethics (Syllabus Resource)
- Author:
- Peace and Security (GIWPS) Georgetown Institute for Women
- Publication Date:
- 10-2020
- Content Type:
- Special Report
- Institution:
- Georgetown Institute for Women, Peace and Security (GIWPS)
- Abstract:
- The following is material to consider for your syllabus related to: Business Ethics, Financial Inclusion, International Finance, International Trade, Labor and Employment, Multinational Corporations. Specifically, there is: Scholarly writing on human rights written by diverse scholars and experts. Scholarly writing providing geographic variety and geographically varied perspectives. Studies and analyses examining diversity, equity, and inclusion-related dimensions of human rights.
- Topic:
- Finance, Ethics, Business, Multinational Corporations, Trade, and Inclusion
- Political Geography:
- Global Focus
29. A Fistful of Dollars? Foreign Sales Platforms and Profit Shifting in Tax Havens
- Author:
- Sébastien Laffitte and Farid Toubal
- Publication Date:
- 01-2019
- Content Type:
- Working Paper
- Institution:
- Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
- Abstract:
- Using public macro-level data on activities of multinationals, we document that U.S. firms geographically disconnect sales and production to avoid paying corporate taxes. We revisit both theoretically and empirically the location determinants of foreign platforms and show that market access motives are far less relevant when considering tax havens. We characterize these countries and shed light on the attractiveness of different tax havens for specific sectors of activity. Our quantification shows that profit shifting by foreign sales platforms in tax havens amounts to about $80bn in 2013. Our findings contribute to the recent policy debate on the reform of international taxation.
- Topic:
- Economics, International Political Economy, Global Political Economy, Multinational Corporations, Tax Systems, and Corporate Tax
- Political Geography:
- United States
30. The Rise of Global Innovation by US Multinationals Poses Risks and Opportunities
- Author:
- Lee G. Branstetter, Britta Glennon, and J. Bradford Jensen
- Publication Date:
- 06-2019
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics (PIIE)
- Abstract:
- For decades, US multinational corporations (MNCs) conducted nearly all their research and development (R&D) within the United States. Their focus on R&D at home helped establish the United States as the unrivaled leader of innovation and technology advances in the world economy. Since the late 1990s, however, the amount of R&D conducted overseas by US MNCs has grown nearly fourfold and its geographic distribution has expanded from a few advanced industrial countries to many parts of the developing world, creating an innovation system that spans the globe. Like many aspects of globalization, including the offshoring of manufacturing over recent decades, the globalization of R&D raises concerns about US competitiveness and loss of technological leadership. At the same time, the spreading geographic location of innovation presents opportunities for US-based companies if the right policies are adopted to seize them. The research presented in this Policy Brief demonstrates that US innovators continue to remain involved in important ways in US MNCs' global R&D activities, and fears of a hollowing out of US capacity to innovate—based probably on previous fears about the hollowing out of US-based manufacturing—may be overstated. Indeed, the large and growing pool of highly educated scientists and engineers in the developing world could increase the rate of global productivity growth, to the advantage of US-based companies and the world in general. The authors conclude that a productive way to capitalize on the globalization of MNC R&D is not to oppose it but to combine emerging-market talent with MNC experience so that innovation can flourish to improve global living standards and fuel economic progress.
- Topic:
- Economics, Globalization, Multinational Corporations, Risk, and Innovation
- Political Geography:
- North America and United States of America