Search results

Multinational enterprises (MNEs) own and control technological resources and capabilities that make them critical actors in accelerating the transition toward net zero. Even beyond the energy sector, stakeholders are putting increasing pressure on MNEs to reduce the carbon intensity of their operations, that is, to improve their carbon performance. While there is unambiguous evidence that national climate policy is a critical catalyst for long-term carbon performance improvements, there is limited research on how MNEs’ carbon strategies react to climate policies. This chapter reviews the concepts, drivers, and strategies connected to carbon performance in the broader sustainability and management literature to clarify potential complementarities to international business (IB). The authors then highlight how MNEs will face increasing institutional complexity along two dimensions: (1) the structural diversity of institutional environments and (2) institutional dynamism, primarily reflected by public policy. The proposed conceptual framework maps these two dimensions to national and subnational levels, and the authors present two data sources that allow the quantitative analysis of country differences in the diversity and dynamism of national climate policy. The authors conclude that there are ample opportunities for IB researchers to explore MNEs’ strategic reactions to climate policy and to inform policymakers about the consequences of national climate policy in the global economy.

This study seeks to explicate how institutional disruptions impact multinational corporation (MNC) subsidiary control choices. It uses institutional theory to understand the influence of formal and informal institutions across countries on the type of control system employed in an MNC manufacturing subsidiary.

This study’s sample is based on a unique dataset from five trustworthy sources. We use multi-level models to account for the hierarchical nature of the sample of 1,630 multinational subsidiaries spread across 26 host countries by firms from 21 home countries.

The institutional distance between the host and the home country has a negative relationship with strategic control. In contrast, the home country’s power distance has a positive relationship with strategic control.

Study findings indicate the need to incorporate formal and informal institutional elements in the control system’s conceptual framing and design. This notion complements existing visualizations of optimizing MNC controls through extant articulations of minimizing governance costs through organizational design choices or strategic needs.

In recent decades, emerging market multinational enterprises (EMNEs) have predominantly adopted a big step internationalization strategy to expand their business overseas. This study aims to examine the effect of big step internationalization on the speed of subsequent foreign direct investment (FDI) expansion for EMNEs. The authors also investigate the potential boundary conditions.

The authors use the random effects generalized least squares (GLS) regression following a hierarchical approach to analyze the panel data set conducted by a sample of publicly listed Chinese firms from 2001 to 2012.

The findings indicate that implementing big step internationalization in the initial stages accelerates the speed of subsequent FDI expansion. Notably, the authors find that this effect is more pronounced for firms that opt for acquisitions as the entry mode in their first big step internationalization and possess a board of directors with strong political connections to their home country’s government. In contrast, the board of director’s international experience negatively moderates this effect.

This study provides insights into our scholarly and practical understanding of EMNEs’ big step internationalization and subsequent FDI expansion speed, which offers important implications for firms’ decision-makers and policymakers.

This study extends the internationalization theory, broadens the international business literature on the consequences of big step internationalization and deepens the theoretical and practical understanding of foreign expansion strategies in EMNEs.

This paper aims to study the impact of economic freedom and some key macroeconomic variables on the foreign direct investment (FDI) inflow in Brazil.

An econometric model is developed that includes FDI inflow as the dependent variable and macroeconomic variables such as the output, current account balance, the real exchange rate, openness and economic freedom as explanatory variables. Annual time series data from 1995 to 2022 is used. Before carrying out the estimation, the time series properties of the data are diagnosed using unit root tests and cointegration tests. Since the data series were found to be stationary in the first difference form and the variables in the model were cointegrated, an error correction model is developed and estimated.

The findings demonstrate that the size of the market (gross domestic product), current account balance and the economic freedom index significantly influence FDI inflow to Brazil. Although the signs of openness and the real exchange rate align with theoretical expectations, they do not attain statistical significance.

To the best of the authors’ knowledge, this is the first formal study on the impact of economic freedom on the FDI inflow in Brazil. The finding of this study adds value to the understanding of FDI dynamics in Brazil, highlighting the critical role of economic freedom and market size in attracting foreign investment.

The purpose of this study is to examine the relationship between the productive structure and the size of the informal economy in Latin American countries.

The study employs econometric techniques for panel data covering the period from 2002 to 2017 and considering 17 Latin American countries. The evidence presented is based on the informal economy data generated by Medina and Schneider (2018) who estimate the size of the informal economy using a structural equation model and the share of manufacturing in total employment as a measure of the size of the manufacturing sector. Also, the study addresses the possible endogeneity bias in the relationship studied and makes the conclusions more robust, thus avoiding spurious correlations that weaken the findings.

The results indicate that most industrialized Latin American countries are associated with a smaller size of the informal economy.

The findings have important policy implications, as they suggest that Latin American economies need to switch the structure of the economy toward more sophisticated productive structures if they want to reduce the size of the informal economy. Thus, more efforts should be deployed to policies to diversify and upgrade economies.

The study contributes to the literature on the informal economy by connecting the country’s productive structure and informality. Specifically, the results show that the productive structure of countries is a plausible explanation for the size of the informal economy.