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The Maturing of Multinational Enterprise: American Business Abroad from 1914 to 1970

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... TCE with organizational learning theory to argue that previous experience operating in politically uncertain environments alleviates policy uncertainty (e.g., Delios & Henisz, 2000). Experienced firms have nevertheless suffered costly expropriations during different historical periods (Wilkins, 1974). A meta-analysis by Tang and Buckley (2020) concludes that there is no consensus as to which governance mode helps MNCs economize on host-country uncertainty. ...
... Studying the banana GVC in a longue durée allows us to uncover how changes in the political and institutional environment determine whether an MNC vertically integrates its operations or relies on domestic providers. The banana GVC was the first agricultural GVC and involved the operations of a vertically integrated structure in multiple countries, antedating that later occurred in manufacturing and extractive industries (Wilkins, 1974). In fact, due to its vertically integrated structure that included a wide range of activities and its political influence, the United Fruit Company (hereafter UFCo), the lead firm in the banana GVC was nicknamed El Pulpo ("the octopus"; Kepner & Soothill, 1935). 2 We support our decision to focus on the banana value chain since MNCs have had incentives to vertically integrate their operations in this industry to enhance coordination, as bananas need to be produced in large plantations in places with certain characteristics in terms of climate, soil quality, or rain patterns (Lee et al., 2012). ...
... The developmentalist coalitions that dominated in Latin America, as they did in most non-Communist countries in the developing world in the same period, were characterized by a nationalist agenda, often involving the military, an involved state, and the alliance of local capital with organized labor (Ciravegna, Fiztgerald, & Kundu, 2013). Latin American governments offered subsidies and tariff protection to manufacturing MNCs, while pressing natural resourceexporting MNCs to concede to the demands of labor and decrease their ownership of assets in favor of local capitalists (Wilkins, 1974). Moody's perceived these events as evidence that the institutional environment was changing in ways that threatened banana exporters, and it advised investors to get rid of UFCo stocks (Moody's Investor Service, 1949). ...
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Research Summary We analyze how the evolution of the broad institutional environment influences the vertical integration strategy of a multinational corporation (MNC) leading a global value chain (GVC). We develop a history‐to‐theory study based on the evolution of the banana GVC between 1899 and 1991. We argue that when a MNC's bargaining power vis‐à‐vis the host government is strong, it will choose a governance structure that addresses contractual uncertainty. When the MNC's bargaining power declines because of changes in the institutional environment, it will prioritize a governance structure that protects its assets. We analyze the evolution of MNC's bargaining power as a result of the interaction of three levels of the institutional environment: global, home country, and host country. Managerial Summary Our study examines vertical integration decisions in a global value chain (GVC) throughout its historical evolution. Using historical sources, we show that when MNC managers perceive their bargaining power to be sufficient to protect them from hostile government actions in host countries, their main concern is that of governing their activities as efficiently as possible by amongst others vertically integrating asset‐specific transactions. When their bargaining power declines, MNCs become more concerned with shielding their assets and rents from expropriations by host‐country governments, thus retreating from vertical integration. We illustrate that the bargaining power of MNCs changes as events at the global, home, and host country levels unfold. For example, MNCs' bargaining power declines in periods featuring economic nationalism, such as the 1960s–1970s.
... Business history research based on a historical perception of time has typically focused on the timing of a firm's first FDI as an event that took place in historical time, such as Verhoef's (2016) study of the South African insurance company SANLAM which was established in 1918 and made its first FDI in 1990 after political conditions changed or Wilkins' (1974) monumental study of the origins and evolution of North American companies' internationalization. ...
... The growth of MNEs ( Wilkins, 1974) Assumption: MNEs develop through historical time periods with distinctive marks that have explanatory power ...
... After the end of World War II, HBS experienced an increasing international demand for its competence, concepts, and especially its new executive education program, AMP. This demand was partly a result of an Americanization process aimed at transforming global business practices based on American models (Djelic, 1998), and hence a market for short executive programs (Amdam, 2020) involving political programs from the U.S. government, such as the Marshall Plan in Europe (Kipping & Bjarnar, 1998), the internationalization of the Ford Foundation (Parmar, 2012), and the growth of U.S. MNEs with an increasing number of subsidiaries (Wilkins, 1974 demand for its expertise from several individual national markets. From 1955 to 1959, HBS received requests for cooperation from 76 countries. ...
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This study examines the timing of the first foreign direct investment (FDI). It explores how the conceptualization and, hence, the understanding of time affects our insights into major internationalization decisions in organizations; specifically, that of navigating into the unknown waters associated with making a first FDI. We introduce a multitemporal approach by drawing on the different temporalities prevalent in history and in business and management to build a platform for analysis that provides a suitable combination of richness and contrast. By examining the process toward making a major internationalization decision in terms of clock, event, stages, and cyclical concepts of time, we gain valuable but also varied insights about a complex process. We conclude that to understand any organization's process of international strategy formation at a certain point (or period) in time, its particularities need to be appreciated in some detail. While the details in this study are unique to the case of Harvard Business School's decision in 1971 to make its first FDI, we argue that the main features of the process are common to conceptualizing the internationalization decision process. As such, the findings should apply more generally.
... Hambrick and Chen (2008) mention the increasing complexity and internationalization of American corporations in the 1970s as an external supportive condition for mobilizing resources to develop the academic fields of strategic management and IB. According to this argument, the supportive condition should be defined in a temporal and spatial context given the global expansion of US corporations in the 1950s and 1960s (Wilkins, 1974). ...
... We suggest that especially two aspects of the American internationalization process were relevant as sources for the mobilization of resources. First, the internationalization of US businesses, shifting toward a stronger focus on forming MNEs in the 1950s and 1960s (Wilkins, 1974), was a source for providing actors within the aspiring academic community with new and unexplored empirical knowledge that needed to be conceptualized. Second, the US business schools that hosted most of the members of the aspiring academic community were also internationalizing themselves. ...
... As Wilkins (1974) argues, the expansion of US MNEs from the mid-1950s was characterized as a combination of continuation and transformation. The FDIs continued to have a focus on manufacturing, advanced technology, and unique products. ...
Article
This article addresses the question of why some business schools internationalize by establishing units abroad. We study their internationalization by examining the process that led to Harvard Business School’s first international strategy and its first foreign direct investment. The study elaborates how internationalization theories are applicable to research on the internationalization of business schools by exploring the role of environment and agency. The analysis shows that in an academic organization characterized as a loosely coupled system, individuals may influence the collective cognition in a strategy process by using new theoretical insights to conceptualize experiences and legitimize decisions. This demonstrates that agency is a multifaceted concept, and its function depends on who has agency and how it is used. By exploring how a new academic discipline, international business, contributed both to the conceptualization and the legitimization of a new strategy, the study provides new insight into the process that leads to the formation of an international strategy.
... 8 VideSola (1988) eLessa (1981). 9 Sobre a expansão das multinacionais no período, consultarWilkins (1974) e Gilpin (1975. ...
... Como Mira Wilkins apresenta em seu clássico trabalho, o processo de internacionalização das empresas norte-americanas pode ser recuperado no século XIX, contudo, foi no pós-guerra que a presença se mostrou dominante(Wilkins 1974). ...
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O presente artigo discute, por meio da sistematização dos dados das cem maiores empresas atuantes no Brasil, a crise do processo de substituição de importações entre as décadas de 1970 e 2010. Nos valendo das informações coletadas a partir do anuário Maiores e Melhores, da Revista Exame, sistematizamos os dados sobre as maiores empresas no Brasil, ao longo dessas quatro décadas, destacando sua nacionalidade e seu setor de atuação. Dando destaque para a análise das empresas estrangeiras, é possível verificar a dinâmica dos ciclos de investimento industrial, identificando os maiores setores instalados no país em cada período histórico. O estudo abarca a fase final do governo militar brasileiro, marcado pelo último esforço de desenvolvimento industrial no país, passando pelas décadas de abertura comercial, caracterizadas por um processo de desindustrialização. No primeiro recorte cronológico do artigo, entre 1974 e 1994, é possível verificar tanto o auge da participação do setor industrial no PIB nacional como os primeiros sinais da crise da industrialização por substituição de importações. No segundo recorte do estudo, entre 1994 e 2015, por sua vez, verifica-se a diversificação da nacionalidade e dos setores econômicos entre as cem maiores empresas, com a redução da participação de setores tradicionais da indústria, ilustrando a tendência da desindustrialização ocorrida no país nas últimas décadas. Ark: http://id.caicyt.gov.ar/ark://s5toy2999
... Based on the Trading with the Enemy Acts, the British and American governments sequestered and sold German-owned assets, including patents. German retaliation followed (Wilkins, 1974;Jones, 2004. After the war, owner nationality mattered. ...
... In addition, business historians with a decidedly historical agenda contributed substantially to the development of MNE research (cf. Jones, 2003;Jones, 2020and Wilkins, 2008), pioneered by Mira Wilkins (1970Wilkins ( , 1974Wilkins ( , 1989Wilkins ( , 2011Wilkins ( [1964) (Kogut, 2009). Today, business historians often study specific internationalisation processes and motives for foreign activities across industries, companies, and even within a single MNE (cf. ...
... It is well established that the multinational enterprise (MNE) as an organizational form has been around since the nineteenth century (Wilkins, 1970(Wilkins, , 1974Jones, 2005a). Historical research on MNEs is often informed by the classic internalization theory proposed by Buckley and Casson (1976) to explain the emergence of the modern, internationally operating firm (for example Wilkins, 1998a;Jones, 2000Jones, , 2005aLopes, , 2010Verbeke & Kano, 2015;among others). ...
... In most cases, seconding staff to foreign markets proved to be effective. They had the knowledge of how to manage the company (Wilkins & Hill, 1964Wilkins, 1970Wilkins, , 1974Wilkins, , 1989Wilkins, , 2004a. ...
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This article engages in a methodological experiment by using historical evidence to challenge a common misperception about internalization theory.The theory has often been criticized for maintaining that it assumes a hierarchically organized MNE based on knowledge flowing from the home country. This is not an accurate description of how global firms operate in recent decades, but this article shows it has never been true historically. Using longitudinal data on individual firms from the nineteenth century onwards, it reveals evidence of how entrepreneurs and firms with multinational activity faced with market imperfections changed the design of their headquarters and their organizational structures.
... 23 The Di Tella group controlled Maquinarias Di Tella (1927) Several of those investments were planned before the Great Depression and worsened economic conditions did not change the companies' plans. Based on previous commitments, 23 U.S. firms built factories or established their commercial branches in Argentina between 1931and 1933(Wilkins 1974Lluch 2019). German firms also increased their presence, especially in the metallurgical sector with Thyssen Lametal, Sociedad Electrometalúrgica Argentina (SEMA) and Tubos Mannesmann. ...
Article
This article analyses the structure and changes of large companies based on a new database of the 200 largest non-financial firms operating from 1913 to 1971 in Argentina. The main contribution of the research consists of the elaboration of the rankings of the 200 largest companies according to their paid-up capital between 1913 and 1971 and the construction of a database of large companies based on homogeneous sources and criteria. The study identifies the long-lasting presence of family-based diversified business groups and foreign multinationals from the first global period to the end of Import Substitution Industrialisation. It also shows that the presence of foreign companies among the 200 largest firms is higher than that identified in other countries. The study constitutes the first comprehensive research into big business in Argentina until the 1970s and a first attempt to identify the life cycles of the largest companies in Argentina.
... In addition, business historians with a decidedly historical agenda contributed substantially to the development of MNE research (cf. Jones (2003); Jones (2020) and Wilkins (2008Wilkins ( , 2009Wilkins ( [2001), pioneered by Mira Wilkins (1970Wilkins ( , 1974Wilkins ( , 1989[1964) (Kogut, 2009). Today, business historians often study specific internationalisation processes and motives for foreign activities across industries, companies, and even within a single MNE (cf. ...
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In the aftermath of the Global Financial Crisis, the long-held confidence that ‘nationality’ would not matter in a globalised economy has dwindled. As the impact of economic and foreign policy on firms’ internationalisation and investment decisions appears to grow, and economic nationalism built on constructs of ‘nationality of the company’ gains weight, companies doing business abroad, including multinational enterprises operating in the US and Europe, are increasingly exposed to (often unexpected) implications of their ‘nationality’. We elaborate on related perspectives to the theme developed in the IB, global strategy, and international management literature and in business history. Based on these readings, we conceptualise the opaque notion of ‘nationality of the company’ and outline perspectives. We argue that ‘nationality’ appears in very different ways and suggest that research should focus more on specific political and institutional environments, and specific constructs of ‘nationality’.
... How history matters (Jones & Khanna, 2006;Welch et al., 2016;Welch & Welch, 2009) and how it can contribute to the development of IB theory are related issues that have seen increased debate in IB (Buckley, 2009(Buckley, , 2016Buckley & Fernandes Pérez, 2016). As Jones & Khanna (2006) point out, at its inception, IB paid close attention to the evolution of international firms (Vernon, 1971;Wells & Fagre, 1982;Wilkins, 1974). However, the fields of IB and business history often address different questions and employ different methods. ...
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Historical research represents an alternative understanding of temporality that can contribute to greater methodological and theoretical plurality in international business (IB) research. Historians focus on the importance of events within their historical context and structure their accounts through periodisation, assume that the temporal distance between the past and present determines the temporal positionality of researchers, and seek to reconstruct past events through historical sources, which require critical interpretation. Historical research provides an alternative methodological approach to temporality, context, and distance with relevance to a range of IB theories.
... 2 Multinationals did exist before WW2. Wilkins (1974) shows that the international expansion of US firms is not just a post-WW2 phenomenon, rather there is a long history which runs parallel to the general growth pattern of US business. Similarly, Jones (2005) describes globalization waves in the nineteenth and twentieth centuries. ...
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The field of international business (IB) has been successful in developing a unique body of knowledge on the multinational corporation and on country-level contexts. A recurring debate concerns its claim to uniqueness, and to associated scholarly characteristics that distinguish IB from other fields of research. I discuss what makes IB research unique by looking at what IB theory can explain and predict. To that end, I leverage key theoretical arguments and empirical insights to advance an understanding of IB centered around a firm’s ability to create added value in more than one location. I introduce a stylized model of the multi-locational firm embedded in multiple business systems characterized by equifinality. As a result of the qualitative disjunctures that separate one place from another, multi-locational firms are confronted with additional managerial and organizational challenges. These challenges are rooted in the process of “othering”. Theorizing on the critical constructs of place, space, and organization, I argue that IB offers the most generalizable approach to understanding firms doing business in more than one location. IB’s ultimate uniqueness lies in the potential of advancing a general theory of the firm in space.
... For the British case, for instance, many large multinationals started as such, partially because of the relatively small home market, lack of natural resources in Britain, or the advantages offered by the British empire (Wilkins 1988). For the case of US-based multinationals, on the other hand, most of these firms became large at home before moving abroad (Chandler 1980;Wilkins , 1974. This section shows how attitudes and policies toward corruption abroad by Amer ican multinationals mirrored the ones toward big firms at home, especially when the multinational was accused of corrupt activities in the United States as well as abroad. ...
... We develop a game theoretical model that focuses on the strategies of the host-country government and their capabilities, and that focuses on the role of political opposition, as well as the motivation of these political actors to either increase taxation or expropriate a multinational. We focus on exportoriented industries because historically it has been the main target of expropriation policies (Jones, 2005;Vernon, 1971;Wells, 1977;Wilkins, 1974). ...
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Scholars explaining the conditions that lead governments to expropriate local operations of foreign multinational firms largely focus on how large sunk costs decrease the multinationals’ bargaining power vis-à-vis the host government and how some political regimes (dictatorships) are more inclined to expropriate than others (democracies). Those explanations miss important considerations related to the host-country technological and political environment. In response, we develop and analyze a game theoretical model suggesting that expropriation of multinational firm operations is more likely when: (1) the host-country government capability to monitor taxation of multinational firms is lower; (2) the host-country government capability to run said operations is higher; (3) the host-country government is relatively independent from the exports of the multinational firm-led exports, and (4) political competition is highly restricted. Perhaps paradoxically, we also find that multinational firms are more likely to “self-tax” when host-country governments are too lenient. We illustrate these model-based findings with matched case studies of host-country government interactions with multinational firms in the Venezuelan and Norwegian oil industries of the 20th century.
... Our empirical study consists of a critical examination of narratives produced by Pan Am. We view Pan Am as an early MNE (Wilkins, 1974), which was the primary and largest US-based international airline in operation between 1927-1991. By the early 1940s alone the airline was operating flights to every continent across the globe. ...
... The origins of the FSC theory Alongside Alfred Chandler, Mira Wilkins was one of the founders the modern discipline of business history. Wilkins' early work (Wilkins, 1970(Wilkins, , 1974Wilkins and Hill, 1964) provided an international companion to the work of Chandler, who himself was the series editor for two of Wilkins books published with Harvard University Press (Wilkins, 1970;Wilkins and Hill, 1964). The importance of the ("Chandlerian") paradigm these scholars created is undeniable. ...
Article
Purpose The purpose of this paper is to decompose the historical and conceptual basis of the Free-Standing Company (FSC) in international business history. This is used to critique the FSC concept. The paper then provides a new framework to explain the lifecycle of these firms in a theoretically sensitive way. Design/methodology/approach The paper is conceptual. The argument is developed through a critical reading of the existing literature. Findings The central argument presented is that the FSC concept is ahistorical and cannot fully explain the firms it considers over time. An alternative approach is proposed. Research limitations/implications The paper does not present new (archival) historical evidence. Originality/value The central contribution/ambition of the paper is to advance the theoretical understanding of international firms of considerable historical importance. The ambition of the paper is to help renew research into this important historical organizational form that speaks directly to the ability of historical research to help advance international business theory.
... As in Pennsylvania, Hershey provided the Cuban company town with rec- reational facilities such as swimming pools and a baseball stadium, plus a golf course for management (Hershey Community Archives, 2016). Hershey established advanced medical care and a pharmacy for workers and subsidized a Havana hospital for more serious cases (Wilkins, 1974). The local medical facilities were originally targeted to the needs of US citizen employees and to alle- viate their concerns about malaria and other tropical illnesses. ...
Article
Although now abandoned, the Hershey sugar mill represents much of Cuba’s history, heritage, culture, and economy. The associated company town, nature gardens, and electric rail line remain in use to date, albeit in deteriorating condition. This paper presents the history of Hershey investment and significance in Cuba, the current state of the site, and the results of an evaluation of the potential for developing the Hershey complex as a sustainable tourism destination and source of local employment. The study concludes that conservation of the site is a cultural imperative for Cuba, but with many obstacles and challenges. Incremental steps toward development may be feasible – particularly with growing potential for open tourism from the US.
... Western MNCs became vilified actors on a range of fronts that included the 1968 global youth rebellions and decolonization movements, as well as scholarly works following Dependency theory, and Western Europeans anxious that could lose against the "American challenge" (Dos Santos, 1970;Packenham, 1998;Servan-Schreiber, 1968). This changing environment in which historical grievances were often used to legitimize increased regulations or expropriation of foreign firms made it difficult for scholars studying MNCs to ignore historical processes and the institutional environment, spurring long-term studies on MNCs' strategies (Wilkins, 1970(Wilkins, , 1974. ...
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Research Summary: We conduct a historical analysis of the multinational corporations’ strategy of creating connections with a host country’s elite as a way of legitimizing its operations in contexts characterized by long‐term political, social, and economic changes. We argue that the success or failure of these strategies depends on (a) the perceived legitimacy of these connections among a host country’s society during times of change and (b) the capability of the multinational’s political connections to shield it from challenges arising when the host country’s social structure is undergoing deep transformations. We outline and follow a business historical approach that combines the theoretical frameworks of international business, strategy, organizational theory, and political science to analyze multinationals operating in Chile’s energy and telecommunications sectors from 1932 to 1973. Managerial Summary: Western multinationals face hard challenges when trying to legitimize their operations vis‐à‐vis the host country’s societies in emerging and underdeveloped countries. One strategy developed by multinationals to neutralize potential challenges to their legitimacy has been to establish connections with influential members of the host country’s elites. We study how this strategy fares in host countries that are undergoing dramatic political and economic changes. We first argue that overtly maintaining open connections with an elite that is viewed as a relic of an illegitimate past can become a liability. And, second, that highly visible connections are more likely to become a liability in times of political and social change than less visible ones. We illustrate our arguments with a historical study of the strategies followed by American telecommunications and oil multinationals in Chile.
... 14 Even simple adaptation by a firm may inadvertently feed back to the institutional environment, but we think there is a distinction to be made between such effects and deliberate activities that are intended to re-shape the institutional environment. 15 Historically, this was the case for example with US manufacturing investment into Europe in the 1920s and 30s (Wilkins, 1974). 16 The work of Oliver (1991;1997) is extremely instructive in outlining the range of different strategic responses of firms, albeit in a non-IB context. ...
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This paper examines the co-evolution of MNE activities and institutions external and internal to the firm. We develop a theoretical framework for this analysis that draws on the more recent writings of Douglass North on institutions as a response to complex forms of uncertainty associated with the rise in global economic interconnectedness, and of Richard Nelson on the co-evolution of technology and institutions. We link historical changes in the character of MNE activities to changes in the institutional environment, and highlight the scope for firm-level creativity and institutional entrepreneurship that may lead to co-evolution with the environment. We argue that the main drivers for institutional entrepreneurship are now found in the increasing autonomy of MNE subsidiaries. Thus MNE agency derives from more decentralized forms of experimentation in international corporate networks, which competence-creating nodes of new initiatives can co-evolve with local institutions. Unlike most other streams of related literature, our approach connects patterns of institutional change in wider business systems with more micro processes of variety generation and experimentation within and across individual firms. This form of co-evolutionary analysis is increasingly important to understanding the interrelationships between MNE activities and public policy.
... In other words, inward FDI is a complementary factor for export performance (Lipsey and Weiss;1984;Clausing, 2000). In addition to that the association between FDI and foreign trade is also supported by greater empirical evidence (Wilkins, 1970;1974). ...
... The dominant theories of how companies internationalize were pri- marily developed in the immediate post-World War II environment when the globe was divided into national markets bounded by consid- erable barriers to cross-border trade and investment fl ows (Wilkins, 1974 ). Information and knowledge fl ows were also hampered in this environment by communication technologies that were primitive and high-cost relative to those available today. ...
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Why have relatively poor and underdeveloped countries been able to spawn so many global firms in the last two decades? Are emerging market multinationals (EMNCs) really different from successful multinationals from developed economies? This book tackles these and other fundamental theoretical questions about EMNCs. A distinguished group of researchers assesses the unique strategies and behavior of successful EMNCs, from the Chinese telecommunications firm Huawei to the Indian conglomerate Tata, to the South African beverages firm SABMiller. They address a range of topics, such as the drivers of internationalization by EMNCs; their distinctive process capabilities; how they catch up with established rivals on technology; how state ownership or business-group affiliation affects their behavior; and why they sometimes relocate their headquarters to advanced economies. This book will appeal to scholars and graduate students in global strategy and international business, as well as consultants of multinational companies, looking for state-of-the-art analysis of EMNCs.
... 65 White suggests that decolonisation can lead to 'crony capitalism' in the political system, a term first coined to describe Marcos Philippines, but which in Malaysia's case indicates an overly close association of the state with a group of favoured entre- preneurs. 66 This subject was developed in White's most recent publication, British Business in Post-Colonial Malaysia, 1957-1970 Here he successfully demonstrates the 'limits of neo-colonialism revealing the more nuanced and sophisticated response of the post-colonial Malaysian government towards expatriate enter- prises'. 68 This is in contrast to the neo-colonialist perspective cited by Malaysian social scientists such as Lim Mah Hui, Hua Wu Yin, and Jomo who asserts that the lack of economic independence is due to the control exerted by British capital over the Malaysian economy. ...
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Business history plays a crucial role in the understanding of the history and socioeconomic development of Malaysia. This paper analyses that role through an assessment of the most relevant colonial, post-colonial, and contemporary literature. Malaysian business history adopts a multidisciplinary approach, which has the potential to propel the discipline to address potentially sensitive political issues in Malaysia, though in the past business history's assimilation into other disciplines has discouraged, with notable exceptions, its potential to explore sensitive topics. In conclusion, the paper outlines the challenges faced by Malaysian business history academics and argues for extending the discipline's boundaries. Copyright 2009 The Author. Journal compilation Blackwell Publishing Asia Pty Ltd and the Economic History Society of Australia and New Zealand 2009.
... In a previous era, roughly between the end of WW2 and the 1980s the corporation and the nation state occupied a clear territorially defined identity in terms of ownership, production, nationality, accountability and geographical reach. Large TNCs -with their roots stretching back to the late nineteenth century (Wilkins, 1974) -tended to be clearly identifiable as national firms (e.g. German auto firms). ...
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“Imperial Crucible” tells the story of the Aluminum Company of America (Alcoa) from the company’s founding in Pittsburgh in 1888 through the 1950s. Although scholars have long contended that American multinational corporations played a pivotal role in the industrialization of the United States, the building of a global working class, and the transformation of European empires, they have tended to see these stories as distinct, rather than interconnected. In contrast, Imperial Crucible focuses on a single firm to draw together the political-economic, working-class, and imperial history of American business. What the industrialists behind Alcoa built, I argue, was not a multinational but a transimperial corporation.
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Proponemos entender la publicación de Documentos Secretos de la ITT por parte de la Editora Nacional Quimantú (1971-1973) a partir de una serie de tensiones con el contexto económi-co y comunicacional durante la Unidad Popular en Chile. Si el libro surge como respuesta al escándalo de los documentos que revelan la conspiración de una multinacional para impedir el gobierno de Salvador Allende, nos interesa el rol del libro impreso en un gobierno revolu-cionario al abordar la antirrevolución. Veremos que el libro tensiona categorías tradicionales del mercado del libro y cuestiona su lugar en el proceso político. La ITT aparece como un enemigo en términos económicos y políticos, y también como un actor cultural al que se decide dar voz. Junto con representar la conspiración de una nueva manera, el libro se inscribe en un escenario más propio de una sociedad de la información que de una república de las letras.
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This paper asserts that the next challenge for business history research is to clarify, with specific examples, the functions of trading companies in generating export transactions. I address this issue here by clarifying the functions of trading companies employed by American oil companies as they developed their businesses in the emerging high-risk market of Japan and expanded their global business activities during the interwar period. In particular, I examine the trading company functions that Mitsubishi Trading Company (Mitsubishi Shōji Kaisha, MSK) provided to the Associated Oil Company. The paper then focuses on the trade of crude and fuel oil, an often overlooked area of trade in existing studies. Moreover, I explore why Associated Oil and MSK were able to maintain a substantial share of the Japanese market for crude and fuel oil by examining their shift in trading methods from commission to proprietary trading. The paper concludes that one of the reasons for MSK’s success was that it took over the costs and risks that Associated Oil should have borne under their original contract while at the same time delegating to itself, with its greater knowledge of local conditions and information, the discretionary power to enter these transactions.
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The role played by one of Japan’s leading trading companies in the overseas expansion of the Japanese automobile industry is the important, if understudied, issue to be examined by the present investigation. How were Japanese manufacturers able to enter key overseas markets, dominated by the more technologically savvy American, British, and European manufacturers? To answer the question, we clarify the role played by the Mitsubishi Trading Company in supporting the Nissan Motor Company in its pioneering export of passenger cars to Australia during the 1930s. We then conclude by considering how these interwar experiences relate to Japan becoming a major source of machinery exports – a key manufacturing nation – that was able to achieve dramatic increases in its light-and heavy-industrial exports to the Americas, Western Europe, and eventually the emerging markets of the Asia-Pacific region in the latter half of the twentieth century.
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This article analyzes the AFL-CIO’s international economic policy activism in the late 1960s and early 1970s within the context of the collapse of Bretton Woods monetary system. It shows that AFL-CIO economists developed a far-reaching critique of multinational corporations that encompassed not only concerns about import competition and capital flight but also charges that multinational firms contributed to the United States’ balance of payments woes. Fighting charges that union wages drove inflation, labor leaders maintained that private capital outflows and intracompany transactions exacerbated U.S. payments deficits. They therefore advocated for capital controls and import restrictions as alternatives to fiscal and monetary restraint. Their efforts to preserve the expansionary policies underpinning postwar liberalism, however, ultimately failed. By calling attention to the AFL-CIO’s failed activism in international monetary politics, the article offers a new vantage point for understanding organized labor’s declining influence in the last third of the twentieth century.
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The business model is the story of how a business creates value and seeks to promote its long-term commercial sustainability. Increasingly—either directly or indirectly—all business value creating systems have been impacted by the trend towards globalization to which many have adapted as they seek to maintain fitness with their environment. This globality increases the degree of risk business models face as they have to adopt to an increasingly complex and unpredictable commercial environment.
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Summary Every year, the publication of new data on FDI inflows by international organizations or national central banks is followed by media reports, equating host countries’ FDI performance with the size of inflows, creating the impression that the objective of FDI policy is to attract ever growing investments. The author argues that the objective is to achieve and increase benefits and to reduce or avoid FDI costs. Benefits [and costs, considered in detail in the sequel to this book] are central to policy analysis. Foreign affiliates of MNEs exert impacts – positive and negative – as domestic enterprises do, on almost all economic and social aspects of host countries. Key benefits and costs are associated with unique characteristics of MNEs, distinct from domestic enterprises. They have been formulated in early FDI/MNE theories and confirmed by empirical studies. The modification of theories resulting from globalization has not significantly altered these characteristics and host country effects. FDI is a package of resources and attributes transferred by MNE parents to their foreign affiliates, useful for economic development. Transfers give rise to high productivity and competitiveness of affiliates, which exert stronger and different impacts on domestic enterprises than the latter do on each other. Foreign affiliates can stimulate host countries’ exports, but they can also leave countries for other locations. FDI is the source of foreign savings for host countries, but MNEs can alter financial benefits from FDI to their advantage through transfer pricing. The said benefits are not automatic. Higher than in domestic firms’ productivity and wages in foreign affiliates are common in all kinds of host countries. They result from the transfer of superior assets and practices from parents to affiliates: technology, organization, management, access to international markets or marketing, or, in general, of business and technological knowledge. However, positive externalities – transfer of knowledge from foreign affiliates to domestic enterprises – do not always occur, because they depend on the absorption capacity of the latter. In its absence, negative externalities will prevail. In globalization, FDI has become the largest stream of foreign capital for emerging economies, crowding in domestic investment, but at times crowding it out. After World War II, inward FDI policy of countries, especially developing ones, has evolved from confrontational in nature to FDI liberalization, competition for better types of FDI and improvements of investment climate. FDI promotion, including incentives and activities of investment promotion agencies, has become a common and important instrument of attracting FDI and benefitting from it, although its effectiveness differs among host countries. Inward FDI policy interacts with economic determinants of FDI inflows, supplementing them and enhancing countries’ FDI potential. Improvements of investment climate have been found, ceteris paribus, to increase FDI inflows. Investment incentives, that is, subsidies to foreign affiliates, are a key instrument to benefit from FDI. They are costs, host countries are ready to incur, in exchange for expected gains such as new jobs, advanced economic activities, exports, R&D or linkages with domestic enterprises. General theory postulates that a subsidy should not exceed expected benefits. Adapted to FDI, it suggests that an FDI project deserves support, if it delivers positive externalities. However, the practical application of this recommendation gives rise to controversies. Over time, the use of FDI incentives in the world has evolved, and it differs among countries as regards its objectives, types, scope and scale. Incentives are typically an integral part of special economic zones, popular in many countries. Incentive competition has intensified, especially for large greenfield or export-oriented projects, resulting sometimes in unreasonably large and doubtful subsidies. The case analysis in this book indicates that, eventually, even a very large support may prove to be valuable for a host country. The European Union is the only organization in the world limiting the size of investment incentives. Empirical studies have not reached consensus on the effectiveness of incentives. But the absence of incentives for export oriented FDI projects typically deprives a host country of the chance to be placed on the short list of investment locations. Poland has attracted large FDI inflows, especially after the accession to the European Union, becoming the largest host country in the Central and Eastern Europe. Over time, foreign enterprises have emerged as an ever increasing and important part of the Polish economy, contributing to economic development, particularly in manufacturing and modern business services, increasing productivity and wages, stimulating innovation and exports, and improving the country’s economic structure. These contributions can continue if Poland meets challenges associated with competition for FDI, including low competitiveness of its FDI promotion system, an average investment climate and low technological readiness, as well as an ambivalent and, at times averse, attitude of the Government to FDI. For each issue lessons for Poland are preceded by theoretical considerations and comprehensive analysis of worldwide trends and situations. As a result, most of the book is on world’s FDI policy rather than on that of Poland.
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