The Obsolescing 'Bargaining Model'? MNC-Host Developing Country Relations Revisited

The traditional bargaining model of MNC-host developing country relations has become obsolete. Today, those relations are better understood as the result of a two-tier, multi-party bargaining process. Tier-1 bargaining, between the governments of host and home countries, occurs bilaterally or throug...

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Bibliographic Details
Published in:Journal of international business studies 2001-01, Vol.32 (1), p.23-39
Main Author: Ramamurti, Ravi
Format: Article
Language:English
Subjects:
Bargaining
Bargaining power
Bilateralism
Business and Management
Business Strategy/Leadership
Developing countries
Economic development
Economic models
Exports
Foreign direct investment
Foreign investment
Government
Host countries
Host country
International agreements
International Business
International relations
Investments
LDCs
Liberalization
Management
Multilateralism
Multinational corporations
Multinational enterprises
Organization
Product differentiation
Repatriation
Studies
Symposium: The Impact of Developing Economies and Economies in Transition on the Future of International Business
Trade agreements
Trade models
Transfer pricing
Variables
World Bank
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Summary:The traditional bargaining model of MNC-host developing country relations has become obsolete. Today, those relations are better understood as the result of a two-tier, multi-party bargaining process. Tier-1 bargaining, between the governments of host and home countries, occurs bilaterally or through multilateral institutions. It produces macro rules on FDI that affect micro negotiations in Tier-2 (per the traditional bargaining model). The extent of FDI liberalization resulting from Tier-1 bargaining varies predictably across home-host country pairs and industries. Suggestions for testing the two-tier bargaining model are also presented.
ISSN:0047-2506
1478-6990
DOI:10.1057/palgrave.jibs.8490936