Towards a holistic framework of MNE–state bargaining: A formal model and case-based analysis

Jakob Müllner and Jonas Puck

Journal of World Business, 2018, vol. 53, issue 1, 15-26

Abstract: In this paper, we develop a holistic framework for MNE–state bargaining based on power-dependence theory. We contribute to IB theory by moving beyond a static, bilateral conceptualization of MNE–state bargaining towards a dynamic, multi-party framework. MNEs can shift the power balance in their favor by (a) reducing sunk costs from the investment, (b) improving access to alternative investments, (c) increasing the host government’s sunk costs, or (d) impeding the host government’s access to alternative investors and buyers. Subsequently, we apply our framework to the Venezuelan oil industry, identifying 12 MNE micro-strategies to achieve a sustainable power balance.

Keywords: Multinational enterprise; Obsolescing bargaining; Power-dependence theory; Extractive industries; Foreign direct investment; Sovereignty-at-bay (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:worbus:v:53:y:2018:i:1:p:15-26

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DOI: 10.1016/j.jwb.2017.07.003

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