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Who gets what: the MNE, the national state and the distributional effects of globalization

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  • T Agmon

    (School of Business Administration, The College of Management, Rishon Lezion, Israel)

Abstract

Globalization is the outcome of the interface between national states and MNEs. It is a negotiated solution rather than perfect market equilibrium. Even in a global liberalized world, national states are trying to generate as much welfare for their residents as they can, while MNEs try to maximize their value. This creates a bargaining situation. A stylized game theory model is presented and discussed, in order to gain insights into the income distributional effects of the globalization process. Two important features of the model are: (a) that there is a need for a carefully spelt out strategy, and (b) that optimal solutions depend on an ability to identify the elements of the bargaining where the opportunity cost is low. A case study of the negotiation between the State of Israel and Intel is presented as an illustration for this general model. Journal of International Business Studies (2003) 34, 416–427. doi:10.1057/palgrave.jibs.8400041

Suggested Citation

  • T Agmon, 2003. "Who gets what: the MNE, the national state and the distributional effects of globalization," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 34(5), pages 416-427, September.
    • Handle: RePEc:pal:jintbs:v:34:y:2003:i:5:p:416-427
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    Cited by:

    1. W. Charles Sawyer & Rossitza B. Wooster & Luisa R. Blanco, 2015. "Does Experience Matter for Patterns of Expansion by US Companies in Latin America and the Caribbean?," Global Economy Journal (GEJ), World Scientific Publishing Co. Pte. Ltd., vol. 15(1), pages 1-24, March.
    2. Anwar, Sajid & Nguyen, Lan Phi, 2011. "Foreign direct investment and trade: The case of Vietnam," Research in International Business and Finance, Elsevier, vol. 25(1), pages 39-52, January.
    3. Colm Kearney & Frank Barry, 2005. "MNEs and Industrial Structure in Host Countries:A Mean Variance Analysis of Ireland’s Manufacturing Sector," The Institute for International Integration Studies Discussion Paper Series iiisdp023, IIIS.
    4. van Wyk, J.J., 2006. "Risk Formation and Management in International Business," Other publications TiSEM 914e43c6-74ad-4879-a709-3, Tilburg University, School of Economics and Management.
    5. Marcelo Bucheli & Xavier Durán & Minyoung Kim, 2024. "My best frenemy: a history-to-theory approach to MNCs’ corporate diplomatic activities," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 55(3), pages 326-341, April.
    6. Liang, Hao, 2015. "Finance and society : On the foundations of corporate social responsibility," Other publications TiSEM 10890071-7018-4327-85de-e, Tilburg University, School of Economics and Management.
    7. Vivoda Vlado, 2011. "Bargaining Model for the International Oil Industry," Business and Politics, De Gruyter, vol. 13(4), pages 1-36, December.
    8. Ott, Ursula F., 2013. "International Business Research and Game Theory: Looking beyond the Prisoner's Dilemma," International Business Review, Elsevier, vol. 22(2), pages 480-491.
    9. Vaaler, Paul M. & Aguilera, Ruth V. & Flores, Ricardo G., 2007. "New Methods for Ex Post Evaluation of Regional Grouping Schemes in International Business Research: A Simulated Annealing Approach," Working Papers 07-0105, University of Illinois at Urbana-Champaign, College of Business.
    10. Taotao Chen & Afonso Fleury & Maria Tereza Fleury & Xiao Chen, 2020. "Government, MNEs and Industry Development: A Perspective of Game Theory," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 19(1), pages 1-26, June.

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