Month: March 2024

Abstract

In this paper, we revisit the industry-level drivers of global product integration, i.e., cross-border product flows within multinationals. While traditional explanations for these flows have focused on benefits from R&D intensity and scale at the parent level, we examine a more comprehensive set of factors, incorporating recent theoretical advances as well as the changing nature of global competition, and considering both the level and direction of integration. Using comprehensive data from the Bureau of Economic Analysis (BEA) over the 1999–2019 period, we argue and show that while factors that increase the returns to aggregation or decrease the returns to adaptation tend to raise the overall level of global product integration, factors that increase the returns to arbitrage have a directional impact, raising flows from foreign affiliates. Finally, we make available in this paper our industry-level data on intra-firm product integration, which we call the Global Product Integration Index (GPII), thus offering a valuable resource for future research.

Abstract

Multinational enterprises (MNEs) and civil society (CS) interact in many ways across countries, with significant implications for these actors and for broader society. We review 166 studies of MNE–CS interactions in international business, general management, business and society, political science, sociology, and specialized non-profit journals over three decades. We synthesize this large and fragmented literature to characterize the nature (cooperation or conflict) and context (geography, industry, and issue) of MNE–CS interactions and uncover their antecedents, outcomes, and moderators. Our review reveals important blind spots in our understanding of the antecedents and outcomes of MNE–CS interactions and uncovers substantial discrepancy between the contexts of real-world MNE–CS interactions and the contexts examined in the literature. We propose actionable recommendations to (i) better indicate and expand the contexts where MNE–CS interactions are studied; (ii) enrich understanding of the antecedents of MNE–CS interactions by leveraging institutional and cultural perspectives; (iii) reorient research on the outcomes of MNE–CS interactions by examining the temporal dynamics of MNE learning and legitimacy, and (iv) emphasize societal relevance as reflected, for example, in green capabilities and moral markets. We hope this review will inspire new inter-disciplinary perspectives on MNE–CS interactions and inform research addressing urgent societal challenges.