Who gets what: The MNE, the national state and the distributional effects of globalization

T. Agmon*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

31 Scopus citations

Abstract

Galization is the outcome of the interface between national states and MNEs. It is a negotiated solution rather than perfect market equilibrium. Even in a global liberalized world, national states are trying to generate as much welfare for their residents as they can, while MNEs try to maximize their value. This creates a bargaining situation. A stylized game theory model is presented and discussed, in order to gain insights into the income distributional effects of the globalization process. Two important features of the model are: (a) that there is a need for a carefully spelt out strategy, and (b) that optimal solutions depend on an ability to identify the elements of the bargaining where the opportunity cost is low. A case study of the negotiation between the State of Israel and Intel is presented as an illustration for this general model. Journal of International Business Studies (2003) 34, 416-427. doi:10.I057/ palgrave.jibs.8400041.

Original languageEnglish
Pages (from-to)416-427
Number of pages12
JournalJournal of International Business Studies
Volume34
Issue number5
DOIs
StatePublished - Sep 2003
Externally publishedYes

Keywords

  • Bargaining games with incomplete information
  • Globalization
  • Negotiation between a state and an mne

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