Behavioral Dynamics and Regulation of Transnational Corporations

  • Hervé LadoEmail author
Part of the CSR, Sustainability, Ethics & Governance book series (CSEG)


Transnational corporations (TNCs) are actively involved in political and economic games in national and international arenas in order to sustain their competitiveness. Powerful States—be they from the western world, Asia or Latin America—participate in these games by supporting their TNCs through economic diplomacy mechanisms. When TNCs operate abroad in weak institutional environments, such as many African countries, there is a strong incentive to use their relatively larger political and economic powers to secure rents. Therefore, they are likely to develop predatory practices such as human rights violations or natural environment damage. Effective regulations against predation depend not only on their intrinsic quality but also on the institutional environment and the behavior of parties involved in their implementation. The development of a global code of conduct requires a sound understanding of TNCs’ behavioral dynamics in relation to their original countries. Drawing on North et al.’s (2009, 2013) taxonomy on social orders, and building on Greif and Tadelis’ (2010) concept of crypto-morality, I build an analytical framework to assess the risk of predation that arises in the interactions between a TNC and a host social order. TNCs adjust their behavior to adapt to their institutional environments, and they make a cost-benefit assessment to arbitrate between a responsible or a predatory behavior. I demonstrate that regulations that force TNCs and States to practice transparency and that impose dissuasive sanctions are most likely to promote ethical and responsible behavior.


  1. Amnesty International. (2014). 30 Après la catastrophe de Bophal, ils continuent à demander justice.Google Scholar
  2. Bisin, A., & Verdier, T. (2001). The economics of cultural transmission and the dynamics of preferences. Journal of Economic Theory, 97, 298–319 (2001).CrossRefGoogle Scholar
  3. David, E., & Lefèvre, G. (2015). Juger les Multinationales. Droits Humains Bafoués, Ressources Naturelles Pillées, Impunité Organisée. Editions Mardaga—GRIP.Google Scholar
  4. Diamond, J. (1997). Guns, germs, and steel. The fate of human societies. New York: W. W. Norton & Company.Google Scholar
  5. Dubresson, A., & Jaglin, S. (2002). La gouvernance urbaine en Afrique subsaharienne: pour une géographie de la régulation. In F. Bart, J. Bonvallot & Pourtier R. (Eds.), Regards sur l’Afrique, Historiens et Géographes (pp. 67–75). IRD. (Online) Available 04 Jan 2017.
  6. Gilpin, R. (1987). The political economy of international relations. Princeton: Princeton University Press.Google Scholar
  7. Greif, A., & Tadelis, S. (2010). A theory of moral persistence: Crypto-morality and political legitimacy. Journal of Comparative Economics, 38(3), 229–244.CrossRefGoogle Scholar
  8. Keohane, R. (1984). After hegemony: Cooperation and discord in the world political economy. Princeton: Princeton University Press.Google Scholar
  9. Keohane, R., & Nye, J. (2012). Power and interdependence, 4th Ed. Logman.Google Scholar
  10. Knorr, K. (1975). The power of nations. The political economy of international relations. New York: Basic Books Inc. Publishers.Google Scholar
  11. Lado, H. (2016). Les responsabilités sociétales obligatoires et volontaires des entreprises. Revue Française de Gestion, 42(260), 143–157.CrossRefGoogle Scholar
  12. Lang-Roth, C. (2013). ArcelorMittal: un accord social trouvé à Florange. France Bleu (30 May 2013). (Online) Available 04 January 2017.
  13. Le Floch-Prigent, L., & Decouty, E. (2001). L’affaire Elf, affaire d’Etat. Entretiens avec Eric Decouty. Paris: Ed. Le Cherche Midi.Google Scholar
  14. Le Monde. (2013). La CIA reconnaît son rôle dans le coup d’Etat en Iran en 1953. (Online) Available 04 January 2017.
  15. L’Humanité. (2012). Florange sera “le cauchemar du gouvernement”. (Online) Available 04 January 2017.
  16. Mitchell, T. (2013). Carbon democracy. Le pouvoir politique à l’ère du pétrole. Ed. La Découverte.Google Scholar
  17. North, D., Wallis, J., & Weingast, B. (2009). Violence and social orders. A conceptual framework for interpreting recorded human history. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  18. North, D., Wallis, J., Webb, S., & Weingast, B. (2013). In the shadow of violence: Politics, economics and the problem of violence. Cambridge: Cambridge University Press.Google Scholar
  19. NSA. (2013). CIA confirms role in 1953 Iran Coup. (Online) Available 04 January 2017.
  20. Nurdin, G., & Djermoun, S. (2015). Les multinationales émergentes. Comment elles changent la donne mondiale. L’Harmattan.Google Scholar
  21. OECD. (2013). Addressing base erosion and profit shifting. Paris: OECD Publishing.Google Scholar
  22. Ozawa, T. (2016). The evolution of the world economy. The ‘Flying-Geese’ theory of multinational corporations and structural transformation. Cheltenham: Edward Elgard Publishing.Google Scholar
  23. Pigou, A. C. (1932). The economics of welfare. London: Macmillan and Co.Google Scholar
  24. Reich, R. (2011). Le Jour d’Après, Sans réduction des inégalités, Pas de sortie de crise. Vuibert.Google Scholar
  25. Stopford, J. M., & Strange, S. (1991). Rival states, rival firms. Competition for world market shares. Cambridge, NY: Cambridge University Press.CrossRefGoogle Scholar
  26. Strange, S. (1988). States and markets. Pinter Publishers.Google Scholar
  27. Strange, S. (1996). The retreat of the state. The diffusion of power in the world economy. Cambridge: Cambridge University Press.Google Scholar
  28. Veblen, T. (1970). Théorie de la classe de loisir. Trad. de Louis Evrard (édition originale en 1890). Gallimard.Google Scholar

Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  1. 1.Asnieres sur SeineFrance

Personalised recommendations