Multinational Enterprises and Sustainable Development in Emerging Markets

  • Pervez N. Ghauri


Foreign direct investment (FDI) is often considered positive for the host countries in emerging markets as it brings in foreign capital and job opportunities. The relationship between MNEs and local governments has however seen its ups and down. Over the years, it has changed from a period of conflict after the World War II, where MNEs were investing for purposes felt to be detrimental to government policies, to a more co-operative nature. The 1980s and major part of 1990s saw the co-operative relationship leading to the danger of race to the bottom through excessive locational competition. In this paper, we examine the most influential literature from 1970s onwards and the current state of this relationship. Our analysis reveals that the increased tensions caused by anxiety due to 9/11 and subsequent development in the political economy, company strategies and government policies. We examine the changing relationship between multinationals and national governments. Thanks to globalisation MNEs are increasingly becoming more powerful and often this process is accelerated due to lack of any collaboration between MNEs and the governments. Thus, governments, particularly in emerging markets, are becoming more and more dependent on multinationals from the developed countries. In this study, we intend to evaluate whether MNEs can play a positive role towards problems of emerging markets such as poverty reduction and economic development.


  1. Barnet RJ, Muller RE (1975) Global reach. Jonathan Cape, LondonGoogle Scholar
  2. Boddewyn JJ (1992) Political behaviour research. In: Buckley PJ (ed) New directions in international business. Edward Elgar, CheltenhamGoogle Scholar
  3. Buckley PJ, Casson M (1976) The future of the multinational corporation. Macmillan, LondonGoogle Scholar
  4. Buckley PJ, Casson M (1991) Multinational enterprises in less developed countries: cultural and economic interactions. In: Buckley PJ, Clegg J (eds) Multinational enterprises in less developed countries. Macmillan, LondonCrossRefGoogle Scholar
  5. Buckley PJ, Casson M (1998) Models of the multinational enterprise. J Int Bus Stud 29(1):21–44CrossRefGoogle Scholar
  6. Buckley PJ, Ghauri PN (1999) The global challenge for multinational enterprises: managing increasing interdependence. Elsevier, AmsterdamGoogle Scholar
  7. Buckley PJ, Ghauri PN (2002) International mergers and acquisitions. Thomson Learning, LondonGoogle Scholar
  8. Buckley PJ, Ghauri PN (2004) The globalisation, economic geography and the strategy of multinational enterprises. J Int Bus Stud 35(2):81–98CrossRefGoogle Scholar
  9. Buckley PJ, Ghauri PN (2015) International business strategy: theory and practice. Routledge, LondonGoogle Scholar
  10. Cavusgil T, Ghauri P, Akcal A (2013) Doing business in emerging markets, 2nd edn. Sage, LondonGoogle Scholar
  11. Coase R (1937) The nature of the firm. Economica (ns) 4:386–405CrossRefGoogle Scholar
  12. Dunning JH (1988) Explaining international production. Allen & Unwin, LondonGoogle Scholar
  13. Dunning JH (1994) Re-evaluating the benefits of foreign direct investment. Transnatl Corporations 3(1):23–51Google Scholar
  14. Dunning JH (2000) The eclectic paradigm as an envelope for economic and business theories of MNE activity. Int Bus Rev 9(2):163–190CrossRefGoogle Scholar
  15. Dunning JH, McKaig-Berliner A (2002) The geographical sources of competitiveness: the professional business services industry. Transnatl Corporation 11(3):1–38Google Scholar
  16. Dunning JH, Wallace L (1999) New Jersey in a globalising economy. In: Phelps NA, Alden J (eds) Foreign direct investment and the global economy. The Stationary Office, London, pp 253–269Google Scholar
  17. Elg U, Ghauri PN, Schaumann J (2015) Internationalization through socio-political relationships: MNEs in India. Long Range Plan 48(5):334–345CrossRefGoogle Scholar
  18. Firth R, Ghauri P (2010) Multinational enterprise acquisitions in emerging markets: linkage effects on local firms. Eur J Int Manag 4:135–162CrossRefGoogle Scholar
  19. Gereffi P, Evans P (1981) Transnational corporation, dependent development and state policy in the semi-periphery: a comparison of Brazil and Mexico. Lat Am Res Rev 15(1/3):31–64Google Scholar
  20. Ghauri PN, Buckley P (2002) Globalization and the end of competition: a critical review of rent-seeking multinationals. In: Havila V, Forsgren M, Håkansson H (eds) Critical research on multinational corporations. Elsevier, Oxford, pp 7–28Google Scholar
  21. Ghauri PN, Rao PM (2009) Intellectual property, pharmaceutical MNEs and the developing world. J World Bus 44(2):206–215CrossRefGoogle Scholar
  22. Ghauri PN, Yamin M (2009) Revisiting the impact of multinational enterprises on economic development. J World Bus 44(2):105–107CrossRefGoogle Scholar
  23. Ghauri PN, Tasavori M, Zaefarian R (2014) Internationalisation of service firms through corporate social entrepreneurship and networking. Int Mark Rev 31(6):576–600CrossRefGoogle Scholar
  24. Ghauri P, Hadjikhani A, Pahlberg C (2015) Multinational corporations’ relationship with political actors: transparency vs. opacity. In: Forssbeck J, Oxelheim L (eds) The Oxford handbook of economic and institutional transparency. Oxford University Press, New York, pp 341–158Google Scholar
  25. Havila V, Forsgren M, Håkansson H (eds) (2002) Critical perspective on internationalization. Elsevier, AmsterdamGoogle Scholar
  26. Hill H, Johns B (1985) The role of direct investment in developing east Asian countries. Weltwirtschaftliches Arch 121(3):355–381CrossRefGoogle Scholar
  27. Hymer SH (1971) The multinational corporation and the law of uneven development. In: Bhagwati JN (ed) Economics and world order from 1970s to 1990s. Macmillan, LondonGoogle Scholar
  28. International Bank for Reconstruction and Development (1997) The state in a changing world–World Development Report 1997. IBRD, Washington, p iiiGoogle Scholar
  29. Kaplinsky R (1991) TNEs in the third world: stability or discontinuity? Millennium. J Int Stud 3(1):53–77Google Scholar
  30. Krugman P (1994) Does third world growth hurt first world prosperity. Harv Bus Rev 72(4):113–121Google Scholar
  31. Lall S (1984) Exports of technology by newly-industrializing countries: an overview. World Dev 12(5–6):741–480Google Scholar
  32. Lall S (1994) The East Asian miracle: does the bell toll for industrial strategy? World Dev 22(4):645–654CrossRefGoogle Scholar
  33. Lall S, Tenbal M (1998) Market stimulating technology policies in developing countries: a framework with examples from East Asia. World Dev 26(8):1369–1385CrossRefGoogle Scholar
  34. Mittelman JH (1994) The globalisation challenge: surviving at the margins. Third World Q 15(3):427–443CrossRefGoogle Scholar
  35. Oxelheim L, Ghauri P (editors) (2004) European Union and the Race for Inward FDI in Europe, Oxford: Elsevier.Google Scholar
  36. Penrose ET (1956) Foreign investment and the growth of the firm. Econ J 66(262):220–235CrossRefGoogle Scholar
  37. Prahalad CK (2004) The fortune at the bottom of the pyramid: eradicating poverty through profit. Wharton Scholl Publishing, PhiladelphiaGoogle Scholar
  38. Prahalad CD, Lieberthal K (1998) The end of corporate imperialism. Harv Bus Rev 76(4):69–79Google Scholar
  39. Prasad, B, Ghauri, P (editors), (2004) Global Firms and Emerging Markets in the Age of Anxiety, New York: Praeger.Google Scholar
  40. Stopford J (1994) The growing interdependence between transnational corporations and governments. Transnatl Corporations 3(1):53–77Google Scholar
  41. Streeten P (1974) The theory of development policy. In: Dunning JH (ed) Economic analysis and the multinational enterprise. George Allen & Unwin, LondonGoogle Scholar
  42. Tasavori M, Ghauri PN, Zaefarian R (2016) Entering the base of the pyramid market in India: a corporate social entrepreneurship perspective. Int Mark Rev 33(4):555–579CrossRefGoogle Scholar
  43. Teegen H, Doh JP, Vachani S (2004) The importance of non-governmental organisations (NGOs) in global governance and value creation: an international business research agenda. J Int Bus Stud 35(6):63–483CrossRefGoogle Scholar
  44. UNCTAD (2015) World investment report. UNCTAD, GenevaGoogle Scholar
  45. UNCTAD (2016) World investment report. UNCTAD, GenevaGoogle Scholar
  46. Vachani S, Smith NC (2004) Socially responsible pricing: lessons from the pricing of AIDs drugs in developing countries. Calif Manag Rev 47(1):117–144CrossRefGoogle Scholar
  47. Vernon R (1966) International investment and international trade in the product cycle. Q J Econ 80:190–207CrossRefGoogle Scholar
  48. Vernon R (1971) Sovereignty at bay. Basic Books, New YorkGoogle Scholar
  49. Vernon R (1981) Sovereignty at bay: ten years after. International Organisation, Summer 1981Google Scholar
  50. Wolf M (2004) Why globalization works. Yale University Press, New YorkGoogle Scholar

Copyright information

© Springer International Publishing AG 2018

Authors and Affiliations

  1. 1.Birmingham Business School – University of BirminghamBirminghamUK

Personalised recommendations