Multinational enterprises and economic inequality

Abstract

Purpose This paper contributes to laying a foundation for a research agenda in international business (IB) on multinational enterprises (MNEs) and economic inequality, through an extensive literature review and development of a conceptual framework. Design/methodology/approach The author conduct a systematic review of studies on economic inequality in IB literature, complemented by a broader selective review of studies in general management, economics, political science, sociology and other disciplines. Findings The review confirms that economic inequality has received little attention in IB research. Most contributions are recent conceptual studies, while empirical studies are scarce. Studies in economics and other disciplines provide further insights on the effects of MNEs on inequality, although specific findings are somewhat mixed. Research limitations/implications The author develop a simple framework outlining channels of effects from MNEs activities on different forms of inequality, discuss challenges and opportunities for IB in addressing this topic and identify some avenues for future IB research on economic inequality. Originality/value This paper is the first comprehensive review of literature in IB on economic inequality. It also presents relevant literature on MNEs and economic inequality from various other disciplines and outlines the contributions that the IB discipline can make to the study of this topic.

Subnational institutions and EMNE acquisitions in advanced economies: institutional escapism or fostering?

“…From a critical IB perspective, the focus of our research holds relevance for at least three reasons. First, heterogeneity between subnational institutions in the home market (our independent variable) is consistent with Yamin and Sinkovics’ (2015, p. 211) observation that emerging markets are “invariably large and somewhat differentiated territories in terms of social and economic development.” Their observation resonates with the importance paid by critical IB scholars to within-country inequalities, such as “uneven economic development” (Dörrenbächer and Gammelgaard, 2019, p. 240) and MNE activities (Rygh, 2019; Ackroyd and Murphy, 2013; Lee and Gereffi, 2015; Roberts and Dörrenbächer, 2016; Roberts, 2019). Second, in a similar vein, the phenomenon of EMNEs internationalizing into AEs rather than EEs (taken as a dependent variable) potentially relates to exacerbating the “global inequality” (Dörrenbächer and Michailova, 2019, p. 113) between these sets of countries, as AEs attract a relatively larger share of OFDI.…”

“…Therefore, our agenda-setting contribution to critical IB studies is to consider the prospect that inequality-induced “escapist internationalization” could, in turn, potentially lead to greater inequalities in the subnational region of investing firm. Although the present study does not directly examine this, it helps to enrich the agenda of critical IB which includes the study of inequalities (Dörrenbächer and Gammelgaard, 2019; Rygh, 2019) and institutional deficiencies in EEs (Becker-Ritterspach et al , 2017).…”

How can international business research contribute towards the sustainable development goals?

“…While inequality has often been assumed to be an undesirable but necessary condition for overall economic prosperity, research shows that inequality has many negative effects, including on health and social stability. However, inequality has received little attention in IB until recently (Rygh, 2021;Narula and Van der Straaten, 2020;Zhao et al, 2021).…”

“…This agenda will also require more attention to the political role of business. Studies of collective action by MNEs are relatively rare in IB (Patnaik, 2019), but will be an important part of research on the SDGs, representing one key channel of "aggregation" between company-level strategies and societal outcomes (Rygh, 2021). However, a broader view of the relevant actors in IB as suggested above will also allow IB to explore further the role of other actors in sustainability transitions, and the interaction between business, technical, social and environmental sub-systems.…”

“…Calls for more multi-level research are not uncommon in IB, but engaging with the SDGs gives this point additional salience. One key question is how to bridge levels of analysis to link firm-level activities meaningfully to aggregate societal outcomes such as the SDGs (Rygh, 2021;Molina-Azorín et al, 2020;Hitt et al, 2007). While multi-level issues have been studied in management literature (Peterson et al, 2012), effects are typically assumed to run from higher to lower levels.…”