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This chapter revisits the paper by Yamin and Sinkovics (2009) on the paradoxical relationship between MNE current strategies and economic development. There is evidence that positive developmental impacts of FDI flows are conditional on high levels of human capital and thus on the existence of ‘good’ infrastructure in recipient countries.

The chapter makes a conceptual contribution and critically evaluates the key points made in the Yamin and Sinkovics (2009) paper.

The build-up of infrastructure and enhancement of domestic capabilities are important underpinnings of sustainable development. ‘Good’ infrastructure, especially basic social infrastructure, is the rock on which otherwise marginalised individuals, groups and country governments can build capabilities.

The chapter draws attention to the ‘prisoner dilemma’ nature of the relationship between MNEs and host governments. Dominant MNE strategies in LDCs create a low payoff for both parties. To proceed towards mutually beneficial outcomes in the MNE–LDC relationship, credible and sustained co-operation between the parties are necessary. Research in the area of mutual value creation has only just emerged in the domain of IB.

Progressing towards ‘sustainability’ requires that MNE managers are advised to develop a global capability in ‘social embeddedness’. LDCs have great potential of becoming strategic markets and important sites for new product and service development. To pursue these opportunities requires credible and sustained commitment to mutual value creation.

This chapter shows that the relationship between MNE strategies and economic development is a contested one. The paper by Yamin and Sinkovics (2009) was one of the first in the domain of IB to suggest that developmental impacts of FDI are contingent on the existence of good infrastructure in recipient countries.

The purpose of this paper is to respond to the comments by professor Ietto-Gillies on the paper on “The MNE as the Crown of Creation?”

The authors argue that the key points made in the commentary are broadly complementary to the arguments set out in the “Crown of Creation?”

The authors agree with the commentary that sources of advantages of multinationality lie “outside the MNE” – through its interactions with national governments and organised labour. However, the authors would caution that the achievement of such advantages may encounter constraints.

The original paper (“The MNE as the Crown of Creation?”) was a critique of mainstream theories of the MNE regarding the assumed superiority of the MNE. The response to the paper makes the argument that any superiority associated with MNE must be sought in its interactions with other actors.

The argument suggests that MNE managers seeking to exploit the advantage of multinationality through production shifting must be aware of the system-wide consequences of such actions.

Given the conceptual nature of the argument and the level of abstraction, solid social implications can only be drawn tentatively.

The key novelty in the response paper is the possible negative effect – for MNEs – of unconstrained exercise of production shifting.

The purpose of this paper is to utilize key insights from social network theory (SNT) to enhance understanding of overcoming the liability of outsidership as a prerequisite for firm internationalization. Specifically, it examines the influence of structural attributes of networks on the motivational stance of both network insiders and outsiders in relation to overcoming the liability of outsidership. A related aim is to explore the role of network positions of insider actors in terms of its impact on the speed of market entry.

The paper draws on the extant literatures on firm internationalization, particularly the liability of outsidership, and SNT to identify to what extent SNT can be utilized to deeply understand the process of overcoming the liability of outsidership. The authors put forward eight propositions linking structural and positioning attributes of networks with overcoming the liability of outsidership.

SNT provides strong potential for a more comprehensive understanding of the internationalization phenomena through shedding light on the relationship between the liability of foreignness and the liability of outsidership. The paper demonstrates that while the cost of overcoming the liability of outsidership is higher in closed target network as compared to open networks, the expected benefits of an insidership position in closed or open networks are affected by the outsider firm’s perception of the liability of foreignness in the market it wishes to enter. Considering the differential enabling characteristics of closed and open networks in terms of facilitating tacit knowledge sharing as opposed to explicit information flows, the authors reveal that liability of foreignness operates as a negative moderator for the relationship between network structure and the willingness of the outsider to invest in gaining insidership. The analysis of the paper also shows that the positional attributes of the network insider are relevant in outsiders’ motivation in terms of the speed of market entry that they seek to achieve.

This study theoretically contributes to the internationalization research through integrating SNT with the liability of outsidership understanding of firm internationalization. This is a timely attempt as no systematic application of the conceptual apparatus of SNT in the internationalization research context has been studied. It adds a more coherent inside-out perspective into the overcoming the liability of outsidership discussion which has been extensively dominated by an outside-in perspective.

The purpose of this paper is twofold: to analyse what theories assume about multinational enterprises (MNEs) when they claim these are superior and to discuss possible explanations for why MNE superiority seems to be dominant in the international business (IB) research field.

A common theme in mainstream IB theories is that multinational enterprises (MNEs) are superior in terms of cost efficiency and innovativeness compared with other types of organizations. A closer look at transaction cost economics (TCE)/internalization theory, evolutionary theory and dynamic capability theory reveal a bias toward MNE supremacy because of how MNEs are conceptualized as firms and therefore fail to explain the essence of “multinational advantage”. These revelations and the strong dependence on the benevolence to provide unbiased data means that MNE supremacy posited by mainstream IB theories is as much a rationalized myth as an empirical fact.

Although mainstream theories differ when it comes to the building blocks that constitute MNE supremacy, they have one attribute in common: they are silent as to why MNEs are superior compared with, for example, domestic firms or other types of economic agents. Irrespective of whether the focus is the strength of the hierarchy, the skill of managers or a common identity, nothing in the theories tells us that these factors are more pronounced in MNEs than in other types of economic actors.

The paper deals with the issue of multinational advantage. It claims that mainstream theories of MNEs tend to assume, explicitly or implicitly, that MNEs are superior in terms of cost efficiency and innovativeness compared with other types of economic agents. The analysis demonstrates that this tendency is a consequence of how MNEs are conceptualized as firms in the different theories as well as of the strong dependence in IB research on the benevolence of MNEs to provide unbiased data. It is concluded that MNE supremacy posited by mainstream IB theories is as much a rationalized myth as an empirical fact.

The purpose of this paper is to highlight the ICT‐enabled enhancement of control capability in MNEs. The literature on MNE structures acknowledges the role of ICT as a support system, but the specific changes facilitated by ICT have remained significantly underdeveloped. The paper seeks to address this issue conceptually and link contemporary ICT advancement with changes in MNE strategy or structure. The paper further posits that certain applications of ICT may paradoxically reduce a key advantage of multinationality.

The paper is of conceptual nature and critically examines and develops literature to generate insight on the implications of ICT applications for MNE development. Specifically the focus is on enterprise resource planning systems (ERPs) and the impact of enhanced visibility of remote operations to headquarter management.

The finding is that ICT application entails a possible trade‐off. It may facilitate an enhancement of control capability for MNE headquarters, however, potentially entails the risk of lessened adaptive capability of subsidiaries, thus potentially constraining the long‐term viability of MNE operations:

Whilst ICT applications may improve coordination and control for the MNE, a level of subsidiary autonomy and initiative taking is still beneficial for MNE strategic and organisational development. ICT applications should not go so far as to suppress it. To this end, managers may be advised to purposefully “blur” subsidiary visibility, by, e.g. allowing the use of different ERP systems.

The main contribution is the integration of literature on ICT advancements, specifically the application of enterprise resource planning systems (ERP), into the IB literature.

A close reading of Adam Smith’s works, “An Inquiry into the Nature and Causes of Wealth of Nations” and “The Theory of Moral Sentiments,” indicates that he would not support the advocacy of free markets wholeheartedly. His view on market systems, although “free,” implies strong institutions and regulations. Adam Smith would have been particularly concerned with the fact that the large multinationals are as much political actors as they are economic actors. He would have argued that there may be ‘moral‘ limits to globalization. In his view, the general rules of morality are (in modern parlance) ‘socially embedded.’ Thus, sympathy and fellow‐feeling mostly operate at ‘close quarters’ and, in particular, they may not be effective at a transnational level.

The purpose of this paper is to introduce the global value chain (GVC) approach to understand the relationship between multinational enterprises (MNEs) and the changing patterns of global trade, investment and production, and its impact on economic and social upgrading. It aims to illuminate how GVCs can advance our understanding about MNEs and rising power (RP) firms and their impact on economic and social upgrading in fragmented and dispersed global production systems.

The paper reviews the GVC literature focusing on two conceptual elements of the GVC approach, governance and upgrading, and highlights three key recent developments in GVCs: concentration, regionalization and synergistic governance.

The paper underscores the complicated role of GVCs in shaping economic and social upgrading for emerging economies, RP firms and developing country firms in general. Rising geographic and organizational concentration in GVCs leads to the uneven distribution of upgrading opportunities in favor of RP firms, and yet economic upgrading may be elusive even for the most established suppliers because of power asymmetry with global buyers. Shifting end markets and the regionalization of value chains can benefit RP firms by presenting alternative markets for upgrading. Yet, without further upgrading, such benefits may be achieved at the expense of social downgrading. Finally, the ineffectiveness of private standards to achieve social upgrading has led to calls for synergistic governance through the cooperation of private, public and social actors, both global and local.

The paper illuminates how the GVC approach and its key concepts can contribute to the critical international business and RP firms literature by examining the latest dynamics in GVCs and their impacts on economic and social development in developing countries.

Large-scale incoming tourism potentially creates a multinational market within the domestic economy of the recipient countries. More specifically, in a number of countries, there is a large influx of ‘foreign’ consumers, or tourists, from many countries and for a significant part of the year. As can be seen from Table 1, for countries such as France, Spain, Austria, or Greece the annual influx of tourists exceeds the population of these countries by very large margins.