<p>Multinational Corporations (MNCs) are facing the paradox of globalization and localization in entering each new market. Generally, there are two perspectives which regard to how a MNC configure its cross-border activities: The first is global convergence perspective, which focuses on leveraging corporate resources and attaining global synergies. The second is international diversity perspective, which lays more emphasis on local adaptation and harnessing diversities. Both perspectives have their pros and cons, a balance between international standardization and local adaptation is vital.</p><p>For the major Auto Giants in the world operating and competing worldwide, the significance of China market is as clear as day to everyone. This paper focuses on how the major Auto Giants balance the paradox of globalization and localization in the China market. In other words, how the MNCs deal with the dilemma of globalization and localization under different strategic contexts? We adopt a model which divides their activities in China into 6 stages and which includes criteria with regard to the dilemma of localization and globalization.</p>

Κατά την παρούσα διπλωματική εργασία αναφορικά με τη συνεισφορά του John H. Dunning στη θεωρία της πολυεθνικής επιχείρησης και της άμεσης ξένης επένδυσης επιχειρείται η βιβλιογραφική ανασκόπηση του έργου του John H. Dunning σχετικά με το εν λόγω θέμα. Συγκεκριμένα, ο John H. Dunning υπήρξε ίσως ο πολυγραφέστερος σε θέματα πολυεθνικών επιχειρήσεων, άμεσων ξένων επενδύσεων και διεθνούς παραγωγής. / This thesis regarding the contribution of John H. Dunning's theory on multinational enterprises and foreign direct investment, attempts to present the literature review of the work of John H. Dunning on this issue. Specifically, John H. Dunning was perhaps the scientist with the greatest literary work on multinational enterprises, foreign direct investment and international production

Aim: This research aims to analyze the different market challenges faced by multinational corporations when operating in frontier markets, taking the Lebanese market as the case example. Methodology: The adopted methodology is based on a perspective multi-case study carried out through a qualitative conduct with several multinational corporations operating in frontier markets and Lebanon in specific. Accordingly, the data collection is based on semi-structured face-to-face, telephone and email interviews with different personnel in allocated companies based on their observations and experiences regarding business operations and market conditions in the country. Subsequently, the gathered primary data is analyzed, discussed and compared with secondary data provided by academic journals, books and trustworthy databases. Findings: Against the background of growing international competition companies increasingly follow internationalization strategies and expand their operations into new markets. Thereby, frontier markets, a subcategory of emerging markets, gain in importance. Simultaneously, new opportunities often go hand in hand with various risks and challenges. In this study four different categories of market challenges were applied and investigated: (1) Political Instability; (2) Economic &amp; Financial Constraints; (3) Corruption &amp; Nepotism; and (4) Cultural Differences. The interviews conducted with several MNCs operating in Lebanon devoted that only the country’s Political Instability affected the case companies’ business operations. Economic &amp; Financial Constraints played a tangential role. Whereas, Corruption &amp; Nepotism and Cultural Differences did not affect the enterprises’ operations at all. Hence, the primary data gathered revealed partially contradictory results in comparison to the findings obtained from the literature review. Contribution: This study addresses various market challenges occurring in frontier markets, a comparably new and uncharted subcategory of emerging markets. Particularly, the market challenges in the case country Lebanon are unexplored yet. Thus, the study contributes novel results and aims to close a research gap. Limitations: The findings presented cannot be generalized, neither to other ME countries nor to frontier markets in general. The scope of this study is limited to one specific market, providing companies’ perceptions about various market challenges when operating in Lebanon. In addition, due to the applied qualitative approach and the authors’ geographical distance to the researched market, the sample size is relatively small limiting the generalization of the study outcomes. Suggestions for Future Research: Due to the recently introduced terminology and categorization, research about frontier markets is limited yet. So far, the ME region in general and the case country Lebanon were not in the researchers’ focus regarding market challenges. This study provides initial points of reference about market challenges MNCs face in Lebanon. Further research with a greater variety of investigated enterprises and industries would be conceivable. Moreover, a research focus on SMEs operating in the country might reveal different findings.

Sustainable Supply Chain Management (SSCM) has increasingly been considered important by both industry and academia, organizations around the world seek to extend or disseminate their sustainable practices to their multi-tier supply chains in order to make the whole chain sustainable. Among the main streams of SSCM research, it is surprising that, with a few exceptions, the leadership role of multinational corporations (MNCs) in their supply chains in an emerging economy has been ignored by researchers. Little is known on how MNCs, assuming leadership in their supply chain, have been able to facilitate their supply chain members to learn sustainability practice in an emerging economy context i.e. the mechanisms. To address this gap in the literature, a multiple-case study is designed. Multi-tier supply chains of three MNCs were selected to investigate their proactive sustainability projects in China. They are: Tetra Pak creating a recycling chain in China; Nestlé modernising China’s dairy industry; and IKEA’s sustainable cotton initiative. By adopting Resource Orchestration Theory (ROT), findings related to supply chain leadership, supply chain learning, multi-tier SSCM are presented. A number of testable propositions are advanced. The main findings of the research are that rather than focusing on the ‘low hanging fruits’ of sustainability, MNCs implement proactive sustainable initiatives requiring a strategic thinking and long term significant investment by engaging their multi-tier suppliers and non-traditional supply chain members. They tend to play a leadership role in the implementation process enabled by transformational and transactional leadership styles. These MNCs applied different leadership styles and governance mechanisms on different tiers of suppliers, which render different supply chain structures in the process of supply chain learning, which includes three stages of set up, operating and sustaining. This research contributes to SSCM research in the following ways: first, it may be the first attempt that investigates multi-tier SSCM through supply chain learning and supply chain leadership angles adopting a ROT perspective. This help to explain how MNCs implement sustainable initiatives in China; second, it contributes to supply chain learning literature by differentiating supply chain learning stages and learning content in terms of focal company knowledge resources and supplier learning complexity to explain the implementation of SSCM initiatives; third, leadership at an individual level is well researched and understood but it is not the case for organisational level leadership. This research enriches our understanding of the role of organisational leadership in MNCs’ SSCM; fourth, the research contributes to multi-tier SSCM with a focus on both supply chain governance mechanisms and supply chain structure; fifth, this research extend ROT from within an organization context to supply chains and include three aspects: breadth (resource orchestration across the scope of the supply chain including both internal and external breadth); depth (resource orchestration across multi-tiers of the supply chain); and project lifecycle (resource orchestration at various stages of supply chain learning stages); finally, a complete theoretical framework is developed to tie together the constructs of supply chain learning, supply chain leadership, multi-tier SSCM with ROT. Practically, a step by step methodology, integrating the key factors affecting the implementation of SSCM initiatives including supply chain learning, supply chain leadership, multi-tier supply chain governance and supply chain structure, is proposed. The ‘best practices’ of the researched MNCs provide a feasible roadmap for these organizations to learn from.

This thesis is a study on solutions for cross-border insolvency of multinational corporate groups, with particular reference to the EU Regulation on insolvency proceedings recast 2015 (EIR Recast). Multinational corporate groups are important players in the modern business world; how to treat them in cross-border insolvency context has been hotly debated. The main issue is how to preserve the value of the group under circumstances where member companies in the same group are in more than one country and subject to more than one set of insolvency law. The existing solutions include substantive consolidation, procedural consolidation proposed by cross-border insolvency law scholars, market/hybrid legal solutions aiming to avoid group-wide insolvency, and the EIR recast which unprecedentedly provides 'group coordination proceedings' to respond to this issue as a procedural cooperation framework. All these solutions will be examined in this thesis in the light of insolvency law/cross-border insolvency law theories and multinational enterprises theories. The aim of this thesis is to examine the existing solutions for cross-border insolvency of multinational corporate groups on the basis of a combination of insolvency law/cross-border insolvency law theories and multinational enterprises theories. The thesis starts from theoretical grounds of corporate rescue and argues that preservation of going concern value and respecting entity law are the goals of corporate rescue law. It further considers theories regarding multinational enterprises and its implications on developing cross-border insolvency solutions for multinational corporate groups. With an understanding of relevant theories, the thesis examines the procedural consolidation solution which focuses on insolvency jurisdictional rules. The result is that procedural consolidation may not be in line with the reality of how the groups are operated and may not provide certainty to the creditors and market. The thesis moves on to examine the market/hybrid legal solutions which purport to be able to avoid group-wide cross-border insolvency. It shows certain merits of these solutions and also reveals the limitations and uncertainty of them. Finally, it argues that a general insolvency cooperation framework- the new group coordination proceedings- is desirable to work as an alternative to the above-mentioned solutions with improved certainty. The thesis tries to improve the utility of the proceedings by providing a recommendation to one of their main weaknesses-the opt-out mechanism.

This PhD thesis develops and tests a model of bargaining between foreign investors and domestic institutions in transition countries. For this purpose this research employs a mixed-methods research methodology combining three studies - two macro-level quantitative and one micro-level qualitative - examining various aspects of the relationships between institutional factors and the quality of inward foreign direct investment (iFDI) flows in transition economies (that is, the impact of iFDI on the host country institutional environment). Specifically, emphasizing the circular nature of the relationship between the applied variables, it attempts, firstly, to identify the impact of the institutional environment in post-Soviet and Central and Eastern European countries on the quality of FDI inflows, and, secondly, to determine whether and how this iFDI affects the quality of the host countries’ institutions. The analysis of the presence, size, and direction of the impact of iFDI is pursued through the study of foreign investors’ (FIs) nonmarket strategies with a special focus on political behavior. Despite the growing role of iFDI and of companies with FDI (especially MNEs) as one of the most important rent-seeking interest groups in many economies, the analysis of the impact of iFDI stocks and flows on the host country’s institutional environment has received much less attention than analysis of the impact of host country institutions on iFDI and has, moreover, produced mostly mixed results. This project is intended to fill this gap and to contribute to theory building on the relationships between iFDI quality, foreign investors’ political behavior, various aspects of institutional environment (including institutional voids), and institutional changes in host countries. It finds evidence for the hypothesis that certain combinations of patterns of quality of iFDI and host-country institutional variables determine foreign investors’ (FIs) political influence and political behavior and may also allow them to pursue their economic goals through manipulation of political regimes and, consequently, reshaping of the host country’s institutions in accordance with their strategic goals. The proposed model was tested quantitatively for a sample of 27 post-Socialist countries and qualitatively for the case of Ukraine. The results of all three studies provide evidence in support of this model. In particular, both quantitative panel studies provide evidence for the existence of ‘blind bargaining’ - a model depicting the cognitive situation of a foreign investor who lacks clarity on the situation he/she is in and, as a result is bound to act in conditions of extreme uncertainty due to the high degree of non-transparancy and instability of the “rules of the game” at any given moment and of their propensity for unpredictable change at any time in the future. ‘Blind bargaining’ originates from the specific state and society relationship that can be formed in neo-patrimonial host states where economic decisions are often not directed towards serving national interests, but towards supporting the personal aims of the officials in power. The first quantitative study shows and explains the attractiveness of such countries to riskier investors, who prefer relatively weak political regimes over stronger ones and who reduce their investment inputs once host states become more assertive. This model of relationships leads to the inflow of mostly ‘malign’ FDI (that is, iFDI that has a destabilizing impact on institutional competencies of recipient countries) into these economies. The second quantitative study examines the quality of iFDI flows in 12 post-Soviet states by determining the impact of attracted iFDI on local institutions, as measured by country risk indicators via a pooled regression model. The latter analysis shows that iFDI has a marginally negative effect on some individual country risk measures and a significantly negative effect on others, implying that there is a strong case for questioning the existing orthodoxy according to which the problems of transition can be overcome via increased iFDI. Given the complexity and context-specificity of foreign investors’ political behavior and its impact on host countries’ institutional capacities, this research acknowledges the need for a more targeted analysis at lower levels of aggregation. The thesis addresses this through a qualitative analysis of the relationships between foreign investors and host states in the context of one country - Ukraine. Interviews with company representatives and various experts were conducted to explore how changes in foreign investors’ bargaining power and, as a result, in their strategic choices regarding their political involvement impact the institutional environment in Ukraine. Based on the combination of empirical and theoretical insights described above, a ‘blind bargaining’ model was developed as a special case of the political bargaining model. It provides a comprehensive framework for explaining foreign investor – host state bargaining relationships in neopatrimonial transition economies and reveals several distinctive characteristics of both parties’ behavior in terms of their goals, resources, constraints, the nature of the bargaining process, strategies and outcomes. However, it is suggested that further country-specific tests are necessary to test its applicability beyond the transition countries, particularly in emerging and developing countries.

This paper provides empirical evidence on the determinants of foreign ownership in manufacturing industries. Foreign ownership, according to the theory of international production, is the result of the combination of comparative and competitive advantage. An adequate examination of the ownership structure of an industry requires the ability to establish empirically the extent to which international competitiveness of firms rests on comparative and competitive advantage. Analysis is based on a sample of the 30 largest manufacturing firms in Austria. The distinction and definition of comparative and competitive advantage as used in this paper and following from it the conclusions about the ownership structure are consistent with the empirical evidence about the share of employees in foreign-owned firms on the industry level. In particular, the classification of firms as foreign- or domestically-owned is in line with the revealed performance differences between foreign and domestic firms. / Series: Department of Economics Working Paper Series

One of the specific characteristics of Austrian Foreign Direct Investment (FDI) abroad is that a large part is carried out by firms, which themselves are affiliates of foreign Multinational Enterprises (MNEs). Such investment is termed indirect FDI in order to distinguish it from direct FDI, made by Austrian-owned firms. The objective of this paper is to analyse, whether the relatively better domestic employment performance of domestic firms (direct FDI) compared to foreign-owned firms (indirect FDI) can be linked to FDI abroad. Based on an analysis of the sales and trade structure of a sample of Austrian investors in Central and East European Countries (CEECs), this paper tests the hypothesis that these two groups of investors have different motives to invest in CEECs and therefore their activities in CEECs differ by type (sales affiliate, production abroad) and consequently the employment effects at home. Regression results confirm that direct FDI are more strongly determined by labour costs and exhibit an employment pattern related to a deeper international division of labour (including production), while indirect FDI is based relatively more on market seeking investment. Empirical results also confirm that employment effects at home differ. The positive (negative) effect of one additional unit of parent (affiliate) sales on domestic employment for indirect FDI compared to direct FDI is larger (smaller). The - despite this empirical fact - relatively better domestic employment performance of direct FDI is explained by their superior sales performance, resulting from restructuring their international division of labour. / Series: Working Papers Series "Growth and Employment in Europe: Sustainability and Competitiveness"

This chapter assesses the effects of "Eastern" EU-enlargement on the race for FDI and the policy implications. We start from the proposition that the evolving production patterns of incumbent and new member states determine the need for and the justification of location policy (LP) and FDI promotion policy (FDI-PP). On the basis of empirical production patterns, it is argued that while the specialisation outcome dominates in the short run, the convergence scenario is more likely to prevail in the medium term. Therefore, old and new EU-members will compete increasingly for the same type of FDI. How EU-enlargement per se affects the spatial distribution of inward FDI is described next. The role of FDI-PPs and LPs in an enlarged EU are discussed on the basis of the convergence outcome. Since the new economics of location competition and of FDI-promotion cast serious doubt on the economic justification and effectiveness of FDI-PP, the chapter concludes with a basic dilemma in the race for FDI: namely, the greater ineffectiveness of FDI incentives in the Single Market and fewer possibilities for differentiation of LPs. The latter is due to harmonisation pressures, which calls for innovative policy strategies by central and regional authorities. / Series: Department of Economics Working Paper Series

This paper reviews and summarises the results of selected studies on performance gaps between multinational enterprises and their domestic counterparts. Performance gaps arise in such fields as productivity, technology, profitability, wages, skills and growth. While these gaps are often attributed to foreign ownership of the affiliates, the theory of the Multinational Enterprise argues that these gaps are due to being a Multinational rather than the nationality of the firm. Empirical evidence on the existence of performance gaps between foreign and domestic firms is supportive of this view: foreign ownership turns out to be a much less important explanatory factor than normally assumed. Firm-specific assets and firm characteristics like industry, size, parent country and multinationality per se are more important. Such results are broadly consistent with those derived in the literatures on ownership change, on foreign entry and on spillovers. We conclude that there is little case for foreign direct investment promotion policies to discriminate between firms on the basis of ownership. / Series: Department of Economics Working Paper Series