The primary concern of this paper is the structural characteristics of an industry that generate returns to transnational integration: manufacturing scale economies and technological intensity. Integration is operationalized as intrafirm flows of resources. Intrafirm trade as a proportion of all international sales is used as an index of integration across 56 manufacturing industries containing U.S.‐based firms. Ordinary least‐squares analysis of the determinants of integration—technological intensity, manufacturing scale, advertising intensity, and internationalization (as a control) reveals that technological intensity, advertising intensity, and the control are significant and scale is not. I argue that technology is the primary determinant of cross‐border integration and the importance of manufacturing scale has been overemphasized, and conclude by discussing the implications of the increasing cost and complexity of technology for the state‐based political system.

No abstract

No abstract

The bargaining power model of HC–MNC (host country–multinational corporation) interaction conceives of economic nationalism in terms of rational self-interest and assumes both inherent conflict and convergent objectives. In extractive industries, there is strong evidence that outcomes are a function of relative bargaining power and that as power shifts to developing HCs over time, the bargain obsolesces. A cross-national study of the bargaining model, using data from 563 subsidiaries of U.S. manufacturing firms in forty-nine developing countries, indicates that while the bargaining framework is an accurate model of MNC–host country relationships, manufacturing is not characterized by the inherent, structurally based, and secular obsolescence that is found in the natural resource industries. Shifts in bargaining power to HCs may take place when technology is mature and global integration limited. In industries characterized by changing technologies and the spread of global integration, the bargain will obsolesce very slowly and the relative power of MNCs may even increase over time.

Transnational corporations have become actors with significant political power and authority which should entail responsibility and liability, specifically direct liability for complicity in human rights violations. Holding TNCs liable for human rights violations is complicated by the discontinuity between the fragmented legal/political structure of the TNC and its integrated strategic reality and the international state system which privileges sovereignty and non-intervention over the protection of individual rights. However, the post-Westphalian transition—the emergence of multiple authorities, increasing ambiguity of borders and jurisdiction and blurring of the line between the public and private spheres—should facilitate imposing direct responsibility on transnational firms. Mechanisms for imposing direct responsibility on TNCs are considered including voluntary agreements and international law. However, I conclude that a hybrid public-private regime which relies on non-hierarchical compliance mechanisms is likely to be both more effective and consistent with the structure of the emerging transnational order.