The Obsolescing ‘Bargaining Model’? MNC-Host Developing Country Relations Revisited

Ravi Ramamurti
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Ravi Ramamurti: Northeastern University

Journal of International Business Studies, 2001, vol. 32, issue 1, 23-39

Abstract: The traditional bargaining model of MNC-host developing country relations has become obsolete. Today, those relations are better understood as the result of a two-tier, multi-party bargaining process. Tier-1 bargaining, between the governments of host and home countries, occurs bilaterally or through multilateral institutions. It produces macro rules on FDI that affect micro negotiations in Tier-2 (per the traditional bargaining model). The extent of FDI liberalization resulting from Tier-1 bargaining varies predictably across home-host country pairs and industries. Suggestions for testing the two-tier bargaining model are also presented.© 2001 JIBS. Journal of International Business Studies (2001) 32, 23–39

Date: 2001
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