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Integrating host-country political heterogeneity into MNE-state bargaining: insights from international political economy

Bhaumik, Sumon, Estrin, Saul ORCID: 0000-0002-3447-8593 and Narula, Rajneesh (2023) Integrating host-country political heterogeneity into MNE-state bargaining: insights from international political economy. Journal of International Business Studies. ISSN 0047-2506

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Identification Number: 10.1057/s41267-023-00651-w

Abstract

The international business (IB) literature has emphasised the heterogeneity of firm strategies in shaping MNE–state bargaining, but largely ignored the heterogeneity of states. In contrast, the international political economy (IPE) literature provides a more nuanced consideration of state strategies and their economic and political priorities. We seek to address this oversight by making two related contributions. In the context of MNE–state bargaining, we first discuss how differences in political systems and the political and economic objectives of states may affect their negotiating stance with MNEs. We consider the impact of changes in the balance of state objectives by considering how much importance governments assign to improving the welfare of its broader population, relative to how important they are concerned with the “private benefits” that accrue to the political elites. This enables us to add micro-foundations to the characterisation of the state. Second, we apply a Nash bargaining framework to MNE–state negotiations that vividly captures the relative bargaining powers of the MNE and the state, including how “outside options” available to these two actors can influence the shape of actual bargains. We discuss the implications of these two contributions for future research.

Item Type: Article
Official URL: http://www.palgrave.com/gp/journal/41267
Additional Information: © 2023 The Authors
Divisions: Management
Subjects: H Social Sciences > HF Commerce
J Political Science > JC Political theory
Date Deposited: 05 Sep 2023 23:18
Last Modified: 28 Feb 2024 00:06
URI: http://eprints.lse.ac.uk/id/eprint/120160

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