Multinationals, international business, and poverty: A cross-disciplinary research overview and conceptual framework

Abstract

This article examines the role of multinationals and international business in poverty alleviation, based on an analysis of articles in the top journals in business, economics, and policy. We develop a conceptual cross-disciplinary framework that maps and disentangles the impact of different types of international business activities on five dimensions of poverty, moderated by country and industry effects. While our study suggests that the impact of all the types of business activities on poverty is still unclear overall, we contribute to research and policy debates by identifying key insights from and main gaps in this cross-disciplinary stream of literature. A distinction is made between firm effects as part of both ‘mainstream’ and ‘responsible’ globalization, and firm-specific activities with and without the explicit goal of poverty alleviation, considering investment and trade. We propose areas for further research based on the framework, including the importance of interaction effects and contextual factors.

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Correspondence to Ans Kolk.

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Accepted by Hafiz Mirza, Area Editor, 26 March 2018. This article has been with the authors for one revision and was single-blind reviewed.

Appendix: List of papers

Appendix: List of papers

Alawattage, C., & Fernando, S. 2017. Postcoloniality in corporate social and environmental accountability. Accounting, Organizations and Society, 60: 1–20.
Ansari, S., Munir, K., & Gregg, T. 2012. Impact at the ‘bottom of the pyramid’: The role of social capital in capability development and community empowerment. Journal of Management Studies, 49(4): 813–842.
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Baud, I. 2016. Moving towards inclusive development? Recent views on inequalities, frugal innovations, urban geo-technologies, gender and hybrid governance. The European Journal of Development Research, 28(2): 119–129.
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Blowfield, M. E., & Dolan, C. 2010. Fairtrade facts and fancies: What Kenyan Fairtrade tea tells us about business’ role as development agent. Journal of Business Ethics, 93(2): 143–162.
Boersma, F. V. 2009. The urgency and necessity of a different type of market: the perspective of producers organized within the fair trade market. Journal of Business Ethics, 86(1): 51–61.
Bolwig, S., Ponte, S., Du Toit, A., Riisgaard, L., & Halberg, N. 2010. Integrating poverty and environmental concerns into value‐chain analysis: A conceptual framework. Development Policy Review, 28(2): 173–194.
Calton, J. M., Werhane, P. H., Hartman, L. P., & Bevan, D. 2013. Building partnerships to create social and economic value at the base of the global development pyramid. Journal of Business Ethics, 117(4): 721–733.
Carmody, P. 2012. The informationalization of poverty in Africa? Mobile phones and economic structure. Information Technologies & International Development, 8(3): 1–17.
Chatterjee, S. 2016. Articulating globalization: Exploring the bottom of the pyramid (BOP) terrain. Organization Studies, 37(5): 635–653.
Chiputwa, B., Spielman, D. J., & Qaim, M. 2015. Food standards, certification, and poverty among coffee farmers in Uganda. World Development, 66: 400–412.
Colen, L., Persyn, D., & Guariso, A. 2016. Bilateral investment treaties and FDI: Does the sector matter? World Development, 83: 193–206.
Crafts, N. 2013. Trade and poverty: When the third world fell behind. Book Review. Economic Journal, 123(566): F193–F197.
Cramer, C., Johnston, D., Mueller, B., Oya, C., & Sender, J. 2017. Fairtrade and labour markets in Ethiopia and Uganda. Journal of Development Studies, 53(6): 841–856.
D’Amelio, M., Garrone, P., & Piscitello, L. 2016. Can multinational enterprises light up developing countries?: Evidences from the access to electricity in sub-Saharan Africa. World Development, 88: 12–32.
De Silva, H., Ratnadiwakara, D., & Zainudeen, A. 2009. Social influence in mobile phone adoption: Evidence from the bottom of pyramid in emerging Asia. Information Technologies & International Development, 7(3, Mobile Telephony Special Issue): 1–18.
Dolan, C., & Rajak, D. 2016. Remaking Africa’s informal economies: Youth, entrepreneurship and the promise of inclusion at the bottom of the pyramid. Journal of Development Studies, 52(4): 514–529.
Duygan, B., & Bump, J. B. 2007. Can trade help poor people? The role of trade, trade policy and market access in Tanzania. Development Policy Review, 25(3): 293–310.
Ferraro, F., Etzion, D., & Gehman, J. 2015. Tackling grand challenges pragmatically: Robust action revisited. Organization Studies, 36(3): 363–390.
Gino, F., & Staats, B. R. 2012. The microwork solution. Harvard Business Review, 12(December): 92–96.
Gohou, G., & Soumaré, I. 2012. Does foreign direct investment reduce poverty in Africa and are there regional differences? World Development, 40(1): 75–95.
Gonzalez, A. 2016. Poverty, oil and corruption: The need for a Quad‐Sector Development Partnership (QSDP) in Nigeria’s Niger Delta. Development Policy Review, 34(4): 509–538.
Hahn, R. 2009. The ethical rational of business for the poor: Integrating the concepts bottom of the pyramid, sustainable development, and corporate citizenship. Journal of Business Ethics, 84(3): 313–324.
Halme, M., Lindeman, S., & Linna, P. 2012. Innovation for inclusive business: Intrapreneurial bricolage in multinational corporations. Journal of Management Studies, 49(4): 743–784.
Hamann, R., & Bertels, S. Forth. The institutional work of exploitation: Employers’ work to create and perpetuate inequality. Journal of Management Studies: https://doi.org/10.1111/joms.12325.
Hartmann, J., & Moeller, S. 2014. Chain liability in multitier supply chains? Responsibility attributions for unsustainable supplier behavior. Journal of Operations Management, 32(5): 281–294.
Hauf, F. 2017. Paradoxes of transnational labour rights campaigns: The case of play fair in Indonesia. Development and Change, 48(5): 987–1006.
Hill, R. P., & Rapp, J. M. 2009. Globalization and poverty: Oxymoron or new possibilities? Journal of Business Ethics, 85: 39–47.
Huq, F. A., Chowdhury, I. N., & Klassen, R. D. 2016. Social management capabilities of multinational buying firms and their emerging market suppliers: An exploratory study of the clothing industry. Journal of Operations Management, 46: 19–37.
Idemudia, U. 2009. Oil extraction and poverty reduction in the Niger Delta: A critical examination of partnership initiatives. Journal of Business Ethics, 90: 91–116.
Ilahiane, H., & Sherry, J. W. 2012. The problematics of the ‘bottom of the pyramid’ approach to international development: the case of micro-entrepreneurs’ use of mobile phones in Morocco. Information Technologies & International Development, 8(1): 13–26.
Ite, U. E. 2007. Changing times and strategies: Shell’s contribution to sustainable community development in the Niger Delta, Nigeria. Sustainable Development, 15(1): 1–14.
Kaplinsky, R. 2011. Schumacher meets Schumpeter: Appropriate technology below the radar. Research Policy, 40(2): 193–203.
Kaplinsky, R. 2013. What contribution can China make to inclusive growth in sub‐Saharan Africa? Development and Change, 44(6): 1295–1316.
Khavul, S., & Bruton, G. D. 2013. Harnessing innovation for change: Sustainability and poverty in developing countries. Journal of Management Studies, 50(2): 285–306.
Kis-Katos, K. 2015. Poverty, labor markets and trade liberalization in Indonesia. Journal of Development Economics, 117: 94–106.
Kiss, A. N., Danis, W. M., & Cavusgil, S. T. 2012. International entrepreneurship research in emerging economies: A critical review and research agenda. Journal of Business Venturing, 27(2): 266–290.
Kistruck, G. M., Beamish, P. W., Qureshi, I., & Sutter, C. J. 2013. Social intermediation in base‐of‐the‐pyramid markets. Journal of Management Studies, 50(1): 31–66.
Kistruck, G. M., Sutter, C. J., Lount, R. B., & Smith, B. R. 2013. Mitigating principal-agent problems in base-of-the-pyramid markets: An identity spillover perspective. Academy of Management Journal, 56(3): 659–682.
Knorringa, P., Peša, I., Leliveld, A., & van Beers, C. 2016. Frugal innovation and development: aides or adversaries? The European Journal of Development Research, 28(2): 143–153.
Loayza, N., & Rigolini, J. 2016. The local impact of mining on poverty and inequality: Evidence from the commodity boom in Peru. World Development, 84: 219–234.
London, T., Esper, H., Grogan‐Kaylor, A., & Kistruck, G. M. 2014. Connecting poverty to purchase in informal markets. Strategic Entrepreneurship Journal, 8(1): 37–55.
Looi Kee, H., Nicita, A., & Olarreaga, M. 2009. Estimating trade restrictiveness indices. Economic Journal, 119(534): 172–199.
Lund-Thomsen, P., Lindgreen, A., & Vanhamme, J. 2016. Industrial clusters and corporate social responsibility in developing countries: What we know, what we do not know, and what we need to know. Journal of Business Ethics, 133(1): 9–24.
Lund-Thomsen, P., Lindgreen, A., & Vanhamme, J. 2016. Special issue on industrial clusters and corporate social responsibility in developing countries. Journal of Business Ethics, 133(1): 5–8.
Maak, T., & Pless, N. 2009. Business leaders as citizens of the world. Advancing humanism on a global scale. Journal of Business Ethics, 88(3): 537–550.
Malsch, B. 2013. Politicizing the expertise of the accounting industry in the realm of corporate social responsibility. Accounting, Organizations and Society, 38(2): 149–168.
Matos, S., & Hall, J. 2007. Integrating sustainable development in the supply chain: The case of life cycle assessment in oil and gas and agricultural biotechnology. Journal of Operations Management, 25(6): 1083–1102.
McAfee, K. 2012. The contradictory logic of global ecosystem services markets. Development and Change, 43(1): 105–131.
McCaig, B. 2011. Exporting out of poverty: Provincial poverty in Vietnam and US market access. Journal of International Economics, 85(1): 102–113.
Meaton, J., Abebe, B., & Wood, A. P. 2015. Forest spice development: The use of value chain analysis to identify opportunities for the sustainable development of Ethiopian cardamom (Korerima). Sustainable Development, 23(1): 1–15.
Medina‐Muñoz, D. R., Medina‐Muñoz, R. D., & Gutiérrez‐Pérez, F. J. 2016. A sustainable development approach to assessing the engagement of tourism enterprises in poverty alleviation. Sustainable Development, 24(4): 220–236.
Minten, B., Randrianarison, L., & Swinnen, J. F. 2009. Global retail chains and poor farmers: Evidence from Madagascar. World Development, 37(11): 1728–1741.
Mitchener, K. J. 2012. ‘Trade and poverty: When the third world fell behind’ by Jeffrey G. Williamson. Book review. Journal of Economic Literature, L(1): 210–213.
Moncarz, P., Barone, S., Calfat, G., & Descalzi, R. 2017. Poverty impacts of changes in the international prices of agricultural commodities: Recent evidence for Argentina (an ex-ante analysis). Journal of Development Studies, 53(3): 375–395.
Mooij, J. 2009. ‘Reclaiming social policy: Globalization, social exclusion and new poverty reduction strategies’ by Arjan de Haan. Book review. Development and Change, 40(2): 391–393.
Murshed, S. M. 2008. ‘Escape from empire: The developing world’s journey through heaven and hell’ by Alice H. Amsden. Development and Change, 39(4): 697–698.
Neu, D., Rahaman, A. S., & Everett, J. 2014. Accounting and sweatshops: Enabling coordination and control in low‐price apparel production chains. Contemporary Accounting Research, 31(2): 322–346.
Newell, P. 2008. CSR and the limits of capital. Development and Change, 39(6): 1063–1078.
Nunnenkamp, P., Schweickert, R., & Wiebelt, M. 2007. Distributional effects of FDI: How the interaction of FDI and economic policy affects poor households in Bolivia. Development Policy Review, 25(4): 429–450.
Opoku, D. K. 2008. ‘Bad Samaritans: The myth of free trade and the secret history of capitalism’ by Ha‐Joon Chang. Development and Change, 39(5): 865–866.
Osuji, O. K., & Obibuaku, U. L. 2016. Rights and corporate social responsibility: Competing or complementary approaches to poverty reduction and socioeconomic rights? Journal of Business Ethics, 136(2): 329–347.
Parmigiani, A., & Rivera-Santos, M. 2015. Sourcing for the base of the pyramid: Constructing supply chains to address voids in subsistence markets. Journal of Operations Management, 33–34(1): 60–70.
Phillips, N., & Sakamoto, L. 2012. Global production networks, chronic poverty and ‘slave labour’ in Brazil. Studies in Comparative International Development, 47(3): 287–315.
Pless, N., & Maak, T. 2009. Responsible leaders as agents of world benefit: Learnings from ‘project Ulysses’, Journal of Business Ethics, 85: 59–71.
Rahaman, M. M., & Khan, N. A. 2017. Making international aid effective: An agenda for aligning aid to social business. Development Policy Review, 35: O96–O117.
Rangan, V. K., Chu, M., & Petkoski, D. 2011. Segmenting the base of the pyramid. Harvard Business Review, 89(6): 113–117.
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Rein, M., & Stott, L. 2009. Working together: Critical perspectives on six cross-sector partnerships in Southern Africa. Journal of Business Ethics, 90: 79–89.
Rice, J. S. 2010. Free trade, fair trade and gender inequality in less developed countries. Sustainable Development, 18(1): 42–50.
Riisgaard, L., Bolwig, S., Ponte, S., Du Toit, A., Halberg, N., & Matose, F. 2010. Integrating poverty and environmental concerns into value‐chain analysis: A strategic framework and practical guide. Development Policy Review, 28(2): 195–216.
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Kolk, A., Rivera-Santos, M. & Rufín, C. Multinationals, international business, and poverty: A cross-disciplinary research overview and conceptual framework. J Int Bus Policy 1, 92–115 (2018). https://doi.org/10.1057/s42214-018-0004-1

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Keywords

  • economic development
  • foreign direct investment
  • global value chains
  • base of the pyramid
  • fair trade
  • poverty alleviation