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The Evolution of State-Owned Multinational Enterprise Theory

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State-Owned Multinationals

Part of the book series: JIBS Special Collections ((JIBSSC))

Abstract

This paper traces the evolution of research by economists and by international business scholars on the structure and behavior of state-owned multinationals (SOMNEs) in market economies. As a background, the chapter examines the reasons for the creation of state-owned enterprises (SOEs) and the issues common to all SOEs, such as their control by government, their performance relative to private-sector firms, the behavior of their managers, and the differences, if any, between private and public entrepreneurs. SOMNEs are an intriguing hybrid. Being state-owned, they are presumed to be state controlled and work to achieve political and social goals, though there is a large body of research showing that this presumption is far from exact. Being enterprises, they are assumed to produce goods or services and market them like any other business enterprise, but their political controllers direct them to achieve multiple other goals, such as generating employment, with no specification of the trade-offs among these goals. Finally, one characteristic of the global spread of operations of a multinational enterprise (MNE) is its ability to evade government regulations, including those of the home country’s government

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Notes

  1. 1.

    Originally the board included 15 members, 8 of whom were elected by the president and approved by the senate, 3 by the common shareholders, and 4 by the preferred shareholders. Since there were no preferred shares, the board operated with 11 members. In 1981, Congress reduced the board to 9 members, all appointed by the U.S. president (Williams, 2001, p. 80).

  2. 2.

    The Government Pension Fund (Statens pensjonsfond Utland, SPU) is a fund into which the surplus wealth produced by Norwegian petroleum income is deposited. Until January 2006 it was called The Petroleum Fund of Norway. As of 2 May 2016 its total value is NOK 7 trillion ($873 billion). (Norges Bank, 2016)

  3. 3.

    The Calvo Doctrine is a foreign policy doctrine which holds that jurisdiction in international investment disputes lies with the country in which the investment is located.

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  1. Tel Aviv University, Tel Aviv-Yafo, Israel

    Yair Aharoni

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Correspondence to Yair Aharoni .

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  1. D'Amore-McKim School of Business, Northeastern University, Boston, Massachusetts, USA

    Alvaro Cuervo-Cazurra

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Aharoni, Y. (2018). The Evolution of State-Owned Multinational Enterprise Theory. In: Cuervo-Cazurra, A. (eds) State-Owned Multinationals. JIBS Special Collections. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-51715-5_2

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