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The purpose of this chapter is to examine the relationship between multi-national firms (MNEs), institutions and innovation.

We empirically examine the link between corruption and innovation within the environment of Russia. The use of data on foreign direct investment (FDI) from both emerging and developed markets provides us an opportunity to test whether the impact on innovation of different types of MNEs varies.

We find that, in the environments with high political risk, corruption may act as a hedge against such risks, boosting the scope and scale of innovation. We, however, find no support for the assumption that the experience at home of emerging country MNEs would offer them the advantage over the developed country MNEs in environments with weak institutions.

One of the major implications of this study is that, in as geographically large country as Russia, it is critical to consider the factors affecting innovation output at sub-national level.

The study is novel as it is the first to examine how innovation is affected by institutions in general and corruption in particular. But in our approach, we use the measure of the actual rather than perceived corruption. Previous studies have largely focused on developed country MNEs; in this study, we examine the impact on innovation of investors from developed as well as emerging economies.

Before exploring the political implications of the emerging middle class, best to begin by defining the term. The economists who herald the growth of the middle class in the developing world today largely construe the term solely as an income category. This is in stark contrast to Marx, who defined class in terms of a social group's relation to the means of production, and it is in stark contrast to Weber, who defined class in terms of a group's pattern of consumption. But even if economists agree to conceive of the middle class as an income category, they differ on how to define this category – whether in relative or absolute terms.³ Some, like Lester Thurow, define middle class relationally. People are middle class if their income falls between 75% and 125% of the median income in a given society. Others define middle class in absolute terms. In the case of Milanovic and Yitzhaki, the boundaries of the contemporary global middle class are set between the average income levels that currently prevail in Brazil and Italy (threshold and ceiling, respectively).⁴ Still others like Diana Farrell define middle class in terms of relative access to discretionary spending. For Farrell, the middle class is distinguished from the poor in that it does not live “hand to mouth.” Members of the middle class are defined as those who have roughly a third of their income left over for discretionary spending after covering the basic cost of food and shelter.

Facilitation payments (petty corruption) are small payments to an officer or employee, public or private, who is responsible for a nondiscretionary service, in order to facilitate, accelerate, or cheapen a procedure, for example, issuing a passport or connecting a house to a power distribution network. They are widespread in some countries, and are often considered irrelevant, but they have very large negative impacts in generating a culture of corruption, affecting the functioning of public offices or private companies and on costs for citizens. This chapter explains what facilitation payments are, why they are an ethical problem for people who pay and receive them, for companies and for society, and the positioning of the fight against those payments within the overall strategy against corruption.

Possible reasons for using kites to kill gazelles are comprehensively reviewed in this article. Even though they are now well inventoried and documented, desert kites are still not well understood, as exemplified by the recurrent controversies about their function and dating. According to the dominant view, kites were hunting structures used to drive and to mass kill large herds of wild ungulates, particularly gazelles. Although kites were intensively used during the Early Bronze Age, some of them could have been built and used before that. Beyond these issues, the cultural and socioeconomic aspects of the kites phenomenon are even less understood, and therefore, we focus on changing reasons for the long-lasting use of kites as hunting devices. We contend that the reasons why they were used during the period of utilization for hunting gazelles changed, in most cases, in response to socioeconomic development. It is hypothesized, for example, that, as a result of urban development, kites may have been increasingly (but not exclusively) used to kill gazelles to trade their products with urban communities and farmers, even though they had other uses as well which are also considered. The main hypothesis presented in this article enables diverse opinions about the types of uses and reasons for utilizing desert kites to be reconciled, including in particular varied reasons given in the literature about why they were used for killing gazelles.

Due to the scope of procurement in the public sector, public procurement policy has the potential to shape the behavior of market actors and promote the growth of businesses with socially relevant characteristics. This chapter looks at the public procurement process in South Korea as well as the implementation of the country’s e-procurement system. Public procurement is vulnerable to corruption in various ways, and Korea’s KONEPS e-procurement system has reduced corruption in the procurement process by increasing transparency, the persistence of data, and the probability of detecting irregularities. Second, this chapter explores how Korea has increasingly incorporated sustainable procurement principles into procurement policy, attempting to foster innovative and environmentally friendly companies, as well as those led by individuals belonging to socially disadvantaged groups. The chapter concludes with a discussion of some of the historical and organizational factors underlying Korea’s successes in public procurement in order to better understand the extent to which currently developing countries can draw upon the Korean case to improve their own procurement policies.

This chapter provides an overview of various new streams in international business (IB) research that will have an important impact on IB studies in the years to come, both from a conceptual and a methodological perspective.

The authors discuss a set of 18 chapters, all included in this research volume, and highlight both the key intellectual contributions and the challenges identified that will need to be taken into account in future research.

The findings of the studies discussed are manifold and profound. Some of the main findings include the following: (1) multinational enterprise (MNE)-centric empirical research studies should be avoided. Resource recombination typically requires taking into account the resource base and the strategies of at least two economic actors. (2) IB studies, almost by definition, need to take into account “distance,” but most prior empirical research has not done a particularly good job in including relevant distance parameters in a methodologically sound way to assess their impact on MNE strategy, operational functioning or performance. (3) Nonbusiness institutions can be very helpful in promoting MNE expansion but include “dark side” institutions that sometimes appear very effective in particular situational contexts. (4) Institutional diversity matters: it can make international knowledge transfers difficult, it can lead to discrimination against firms from specific nationalities, it certainly suggests that there is no generalizable multinationality–performance relationship, and it raises the question whether new theory is needed to accommodate previously neglected institutional contexts.

This overview of several recent IB studies confirms that managing the international innovation chain in its entirety is fraught with difficulties. MNE senior management must economize on bounded rationality (meaning: improving information quality and information processing) and bounded reliability (meaning: making sure that economic actors make good on open-ended promises, whether implicit or explicit). Any IB transaction by definition entails new resource recombination. Doing so effectively requires correct information, reliable partners and a recombination outcome that supports value creation for the MNE. Multiple, practice-driven puzzles in the IB context are proposed to the reader, and the outcomes are often unexpected.

A variety of new concepts and methodological approaches are proposed to improve the quality of future IB research.