If Teva Changes its “Nationality,” would Israel's Economy be Affected?

The Future of Foreign Direct Investment and the Multinational Enterprise

ISBN: 978-0-85724-555-7, eISBN: 978-0-85724-556-4

ISSN: 1064-4857

Publication date: 3 May 2011

Abstract

The hypothetical case of a change in Teva's nationality and its implications are employed to demonstrate the general validity of the concept of “Distance Premium,” to examine the implication of nationality to individual multinational business enterprises. The chapter explores the proposition that despite its declining effect, due to far reaching technological and political developments, the distance premium, continues to favor home country over host country locations and intra- over interorganizational value activities. The chapter goes on to examine expected changes in the distribution of rents generated by the MNEs between different stakeholder groups. It concludes that, with the exception of stockholders whose welfare is generally not affected by change of nationality, other stakeholders in the new home country gain at the expense of old home country stakeholders.

Citation

Hirsch, S. (2011), "If Teva Changes its “Nationality,” would Israel's Economy be Affected?", Ramamurti, R. and Hashai, N. (Ed.) The Future of Foreign Direct Investment and the Multinational Enterprise (Research in Global Strategic Management, Vol. 15), Emerald Group Publishing Limited, Bingley, pp. 357-377. https://doi.org/10.1108/S1064-4857(2011)0000015020

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Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited

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