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Responsible Consumption and Production
The blurring of corporate investor nationality and complex ownership
Recent years have seen a significant increase in the complexity of multinational enterprise (MNE) ownership structures. Complex corporate structures raise concerns about the effectiveness of national and international investment policies based on the notion of investors nationality. This motivates this research effort aimed at analysing the ownership structures of some 700 000 foreign affiliates (FAs). A new methodology the bottom-up approach is introduced. The main objective is to empirically map the shareholder space of FAs along the vertical dimension from the direct shareholders to the ultimate owners. We find that FAs are often part of transnational investment chains; more than 40 per cent of foreign affiliates have direct and ultimate shareholders in different jurisdictions (double or multiple passports). Based on shareholders nationality we then propose and empirically analyse the salient features of four main archetypes of FAs ownership structure: plain foreign conduit structures round-tripping and domestic hubs. Each poses specific challenges to policymakers.
Why do African multinationals invest outside their home region? Should they?
This study draws on preliminary case evidence to explore the motivations and advisability of engagement by African multinational enterprises (MNEs) in outward foreign direct investment (FDI) activities outside their home region. It complements recent research on MNEs from emerging markets focused on the BRICS (Brazil the Russian Federation India China and South Africa) economies with virtually no attention to potentially important players from rising Africa. The MNEs explored in this study are active in the energy manufacturing construction chemicals agribusiness extractive/mining and financial services sectors and they have investment footprints both in countries in the North and the South. Their investment decisions are motivated by the search for market opportunities strategic assets/resources and performance-boosting relationships though more advanced economies appear to attract more strategic asset-seeking FDI from African MNEs. The paper argues that intra-regional investments by African MNEs should continue to be prioritized but selective and strategic extra-regional FDI undertaken with an eye on furthering global competitiveness also requires appropriate policy support. This seems even more sensible given that the acceleration of borderless digital internationalization and the increasingly blurred nationality of MNE affiliates are lessening the relevance of regional distinctions.
Why do western SMEs internationalize through springboarding? Evidence from French manufacturing SMEs
This study applies both the internationalization and regulatory focus theories to understand what motivates SMEs to implement springboard strategies i.e. to invest in a country to re-export to third countries. While some academics emphasize the importance of free trade agreements and cost differentials others highlight the role played by the individual and network dimensions. We conducted 66 in-depth interviews and five days of non-participant observations with five French manufacturing SMEs and ten investment promotion agencies. Our analysis revealed the existence of firm network and country-related motivations springboard strategies being mainly firm-driven as well as common partially-shared and specific motivations. Public policy to promote and/or attract springboard-oriented foreign direct investment (FDI) should look at developing dedicated support and educational programmes for SMEs offering better access to promising markets by removing barriers and enforcing transparency and trade agreements.
Substituting expats with locals: TNCs and the indigenization policies of Saudi Arabia
Owing to rising unemployment among Saudi nationals the Kingdom of Saudi Arabia (KSA) has instituted Saudization a localization policy that strives to induce the employment of more Saudi nationals in the private sector. A major gap in the literature is the lack of empirical investigation regarding the relationships between indigenization and the underlying principles of its process. This study seeks to fill this gap. The study assesses the success or otherwise of the Saudization initiative empirically and uncovers several features. It finds that TNCs that experience the external pressures to localize their workforce and those that wish to enhance their social legitimacy are more likely to comply with Saudization. Furthermore TNCs do not believe that the process of localization provides them with economic gains. Legal coercion to adhere to the Saudization initiative turns out to be a highly significant instrument in making TNCs adhere to the localization process. The study also finds that neither age nor the size of the firm have an impact on the Saudization programme. Implications for theory and practice are drawn out.
Covid-19 and investment — an UNCTAD research round-up of the international pandemic’s effect on FDI flows and policy
The shuttering of commercial activity in the face of the Corona (Covid-19) pandemic will have a dramatic effect on the global economy. UNCTADs Division on Investment and Enterprise has been monitoring the impact on investment as well as its implications for development.1 In the face of the unprecedented circumstances this issue of the Transnational Corporations furnishes a brief overview of this work notably from the perspective of foreign direct investment (FDI) and investment policy. UNCTADs World Investment Report (forthcoming June 2020) will provide an expanded and in-depth analysis of FDI trends and investment policy developments that also accounts for the impact of the pandemic.
How TNC subsidiaries shine in world cities: Policy implications of autonomy and network connections
The study examines the relationship between performance and patterns of autonomy and the network relationships used by the foreign subsidiaries of transnational corporations (TNCs) in world cities compared to those subsidiaries outside these locations. This is done by exploring if these patterns differ in foreign subsidiaries in Greater Copenhagen compared to elsewhere in Demark. The findings reveal that there are important differences in the relationships between performance and the autonomy and network structures in foreign subsidiaries. These findings are discussed and policy implications distilled. The study finds that the scope of inward foreign direct investment (FDI) policy could be usefully extended to encompass urban development thereby helping cities develop assets institutional support and infrastructure that can enhance agglomeration benefits and global connectivity. The findings indicate policies aimed at helping subsidiaries embed in host location networks and incorporate these networks into other parts of the parent company could be beneficial. The paper also discusses economic and social inequality that can stem from network patterns and the inclination of subsidiaries to operate autonomously in world cities. It proposes policy options that can lead subsidiaries to undertake high-value activities and innovation in world cities.
The cornerstone of life
We are at a crossroads in human history. Our actions are changing the planet in unprecedented ways and if we carry on as at present the consequences could be disastrous. But right now we still have an opportunity to change course. If we come together to take the decisive steps needed we could chart the way toward a sustainable future where people live in harmony with nature.
Reflections
The Norwegian countryside is a magnificent playground for a kid. Swing-sets and slides are fun. But for a child nothing beats striking out into rolling hills and mysterious towering forests. There is adventure everywhere. I have always lived in a city but I was lucky growing up to have ample opportunity to explore these treasures of Norway.
Stepping up action
Canada is proud to host this year’s World Environment Day. The United Nations General Assembly first designated June 5 as World Environment Day 45 years ago. Today it remains a chance to connect with our environment and each other and to continue to build a more sustainable world for our kids and grandkids.
Telling a powerful tale
To change a society as the philosopher Ivan Illich wrote “you must tell a more powerful tale one so persuasive that it sweeps away the old myths and becomes the preferred story one so inclusive that it gathers all the bits of our past and present into a coherent whole one that even shines some light into our future so that we can take the next step…”
Conserving the world’s roof
It was a chilly February day. Dangwen and his wildlife monitoring team from the village of Yunta patrolled along the upper reaches of the Yangtze River. The river was frozen solid easy for poachers to walk over. That day they encountered 220 blue sheep five white-lipped deer and a line of otter footprints. On the infrared camera traps that they had set up throughout the valley three snow leopards appeared a mother and two cubs – and the cubs had grown much bigger than three months before.
Alive to solutions
In 2015 engineering student Jorge Zapote and his team from the University of Calgary decided to take on a problem that affects millions of poor rural families around the world – and one whose solution could be key to remedying climate change. They wanted to find a low-cost way of keeping fruit and vegetables cool and fresh in low-resource settings without using electricity.
Natural cure
This amazing spinning ball of rock and water hurtling through space at more than 100000 kilometres an hour provides us with everything we need to live and be healthy. It’s a delicate balance with various interconnected natural systems — hydrologic and carbon cycles ocean and atmospheric currents among them — creating ideal conditions for human life.
If you eat, you’re in!
What wouldn't we do for our kids? We play in the park cut down on sugar walk them home from school talk around that all-important dinner table - the stuff of everyday life that shows we care.
Connecting in nature
Canada has 46 national parks and reserves 171 national historic sites and four national marine conservation areas adding up to 300000 square kilometres of protected areas. They represent the country's massive yet varied landscapes from the towering mountains of Waterton Lakes National Park in Alberta to the sparkling sands of Sable Island National Park Reserve off Nova Scotia to the lush rain forest of Gwaii Haanas National Park Reserve on the coast of British Columbia. All these places tell Canada's ecological and cultural story. As its population becomes increasingly urban – and with the average park over two hours from a city – the need is to make more visiting opportunities available.
The rights of rivers
History was made recently when a court recognized the rivers Ganges and Yamuna as a living entity. This affords opportunities to tackle problems related to water and climate change sustainably amid the rapid melting of Himalayan glaciers the depletion of groundwater resources pollution of ground and surface water resources erratic rainfall patterns that wreak havoc with human lives and property and calamities like flash floods landslides avalanches and famines.
Nature of risk
Conditions are conducive to human life in most inhabited areas much of the time but nature can strike at almost any moment. When severe natural catastrophes hit densely populated and economically developed areas these rare events bring large economic costs. They can also hurt a sovereign credit rating a reflection of a national government’s ability and willingness to honor its financial obligations on time and in full.
Attention! That’s a precious resource
There was no need to implore our forebears to get outdoors and be in nature. Presumably these ancestors also rarely experienced any gap between what was interesting in their environment and what was important to attend. But the times are ever-changing. Today these two vectors – the important and the interesting – are often at odds as inordinate amounts of information and the ease of accessing it dominate our swirling world.
UN environment at work. Cutting poverty by fostering environmental sustainability
Forests lakes rivers and fertile land provide income and employment for many men and women living in Africa. But unsustainable use of these resources can trap them in poverty. One way to reduce poverty and catalyse change is by producing and using evidence that brings together the environmental economic and social dimensions of development. This is the so-called integrated approach to sustainable development.
Recreating the commons
When I presented core concepts and findings on local economic development as a possible report to the Club of Rome under the title "The Blue Economy: 100 innovations 10 years 100 million jobs" in April 2009 I sketched out a vision. This was based on an understanding that nature in general – and a wide range of ecosystems in particular – has overcome nearly every imaginable challenge over the past millions of years and therefore provides an inspiration for how society can chart a pathway towards the future.