In this paper we analyze the distribution of pay and changing trends of inequality in Argentina and Brazil, illuminating the specific winners and losers, by region and by economic activity (sector). In both countries we find that inequality rose in the neoliberal period, but that it declined following the severe crises of neoliberal policy, in 1993 in Brazil and in late 2001 in Argentina. This period of post-neoliberalism is characterized in both countries by a decline in the economic weight of the financial sector and a recovery of the position of the civil service. In both countries, the rise in inequality leading to the crisis produced an increase in the relative position of the major metropolitan centers; this positional advantage also declined modestly in the post-crisis recovery period.

The activist foreign trade missions of the Clinton Administration are intended to open strategically important, but often difficult-to-enter, emerging markets to US foreign investment with government-to-government negotiations. Some research streams suggest that participation in a trade mission should benefit firms, while others suggest that participation should have no discernible benefit. This paper performs several event studies to analyze the stock return of a portfolio of the publicly traded firms participating in trade missions from 1993 to 1996. It finds that participants did not experience positive or significant abnormal stock returns as a result of mission participation, regardless of how the event date is defined or the data segmented.

Formal regulatory parity can entail counterintuitive effects. In a series of state statutes, municipal governments have been directed to issue cable TV franchises to new competitors only after (a) formal hearings considering the ‘public interest’ in competition; and (b) imposing terms and conditions which are at least as burdensome as those contained in the incumbent's franchise. While billed as ‘level playing field’ laws, economic theory, an important case study in Connecticut, and a probit analysis of Ameritech's cable franchise acquisition strategy suggest that these statutes actually tilt the field against entrants.

Industry has organized increasingly effective self-governance initiatives since the 1980s. Almost all of these are based on the economic leverage of large retailers and manufacturers over their worldwide supply chains. This article documents commonalities in six of the best-studied examples—coffee, dolphin-safe tuna, fisheries, lumber, food processing, and artificial DNA—and offers straightforward economic and political theories to explain them. The theories teach that oligopoly competition can strongly constrain private power so that firms are answerable to a shadow electorate of consumers. Furthermore, rational firms often benefit from ceding significant power to suppliers and NGOs. These results extend traditional arguments that free markets constrain private power and suggest an explicit framework for deciding when private politics are legitimate.1

This paper explores the motives and mechanisms behind data localization implemented by states to protect data, which is essential to emerging technologies such as Artificial Intelligence. Despite the significant negative aspects of data localization for states, the practice has become increasingly prevalent, leading to the unexplored question of why states choose to implement it. This suggests that data localization is a form of economic means derived from digital technologies and employed by states to serve political objectives. Focusing on the data in platforms, the theoretical mechanism of data localization is captured in light of two factors: network perception and security externality. Network perception pertains to a state’s perception of the positive network effect generated by platforms, while security externality refers to a state’s consideration of the security implications in relation to the economic benefits derived from the positive network effect, serving the national interest in domestic and/or international contexts. To substantiate these theoretical propositions, the paper employs a comparative case study approach where Vietnam, Singapore, and Indonesia have been chosen as empirical cases based on the selection strategy. The paper bridges the concept of economic statecraft with digital technologies, fosters interdisciplinary discussions, and offers policy implications.

Scholars have shown that corporate responsibility (CR) initiatives can create intangible assets that help MNCs reduce their liability of foreignness and even gain competitive advantage over local rivals. But scholars have not addressed the ability of MNCs to transfer CR initiatives to subsidiaries. This study builds theory about the conditions that influence success and failure in the transfer of CR practices from headquarters to overseas subsidiaries. We analyze CR transfers from the headquarters of an Indian multinational to its subsidiaries in China and the U.K. Our findings suggest that CR transfer differs in substantial ways from operational practice transfer. In particular, the ambiguity of the CR initiative, the social competency of the business unit transferring the CR initiative, and the active involvement of local stakeholders play significant roles in CR transfer success.

We know from observation that some democracies intervene deeply in their domestic economies while others adopt a more laissez faire approach. Can we explain these differences solely with ideology, or are other political influences also at work? I argue in this paper that elected leaders sometimes opt for hefty economic regulation purely to generate sources of patronage that can be used to maintain their political positions. Leaders are most tempted to take this approach, I contend, when their political parties are not stably linked to sources of electoral support. Unstably linked governing parties will tend to have very short time horizons, focusing on the immediate objective of avoiding massive vote losses in the next election. As a result, they will be less concerned with the potential future damage that a patronage-based policy may inflict on the national economy. I find support for this argument with a close examination of Indian economic policy under Indira Gandhi. Prime Minister Gandhi, I contend, increased the Indian state's control over trade, industrial production, and credit allocation just as the Congress Party's linkages to the electorate were destabilizing.

This paper explores the determinants of pro-minority shareholder corporate governance reforms. Using a Cox conditional model in gap time, this paper provides new empirical evidence on the linkages between the adoption of pro-minority shareholder corporate governance reforms at the firm level and government ideological affiliation in 16 OECD countries over the period 1970–2009. I find strong evidence linking rightward shifts in government ideological orientation with the adoption of minority shareholder protection legislation. This result supports our argument that changes in the composition of the coalition of heterogeneous interests and/or a change in the expectations of the parties’ constituency will affect government strategy on the adoption of pro-minority shareholder corporate governance reforms. I also find that the macroeconomic context at the international level may influence the adoption of these reforms. Our findings suggest that international economic integration has resulted not in the convergence of corporate governance regimes to the Anglo-Saxon model, but rather the emergence of hybrid corporate governance systems.

This article examines the roles of multinational corporations and the European Union (EU) in structuring global competition around wireless standardization. It analyzes the realities of global competition in information and communications technology (ICT) markets from a more liberal-strategic viewpoint than the subsidy-based industry support promulgated by strategic trade theorists in the 1980s and 1990s. According to a liberal-strategic trade perspective, public actors try to tweak the rules of the world economy to structure global competition in ways that enhance job creation, overall competitiveness in high-technology sectors, and domestic welfare, rather than being primarily concerned about import competition. The story of the European approach to global standardization and competition—and the strategic use of international standards bodies by multinational corporations—primarily represents an aggressive outward-oriented strategy. European actors pursued a globally oriented strategy in the European Telecommunications Standards Institute (ETSI) with the objective of aligning Europe with market and policy developments in the rapidly growing markets of the Asia—Pacific region. By downplaying the importance of import competition, often stressed by strategic trade theorists a liberal-strategic approach to the ICT industry focuses on the prospect of cutting-edge innovations based on a coherent industry strategy that looks at the creation of internationally competitive technologies in the longer-term rather than at incremental change and current import competition pressure.

This paper examines the attitudes of multinational corporations (MNCs) toward the U.S.-China trade war through an original survey of China-based MNC subsidiaries in the manufacturing industry. Our argument is in two parts. First, firms that have relocated production outside of China or are considering such moves should be less likely to oppose the trade war as they possess outside options that reduce their vulnerability to trade restrictions. Second, firms’ tendency toward production relocation can in turn be explained by their local sourcing dependence, as measured by the level of such dependence and the degree to which their operations require supplier certification. This is because firms more heavily embedded in local supplier networks face stronger resource dependence that increases organizational inertia, reducing their ability to switch to alternative suppliers and therefore relocating production to other destinations. Our findings corroborate our hypotheses, highlighting how the heterogeneity in MNCs’ supply chain relationships may influence both their manufacturing relocation decisions and trade policy preferences.

Although the effects of globalization on income inequality has received much attention, missing from the discussion is the role played by credit rating agencies (CRAs) on income inequality. Using a sample of seventy developing countries from 1990–2015, we find that bond ratings have significant, yet indirect, effects on income inequality. We see that interest rate spreads, and to a lesser degree tax, labor, and monetary policies, mediate the relationship between ratings and income inequality. Specifically, developing countries receiving bond downgrades observe a rise in interest rate spreads. Countries with higher interest rate spreads tend to have less available credit, which reduces output and production, promoting surplus labor and its consequences for those at the bottom of the income distribution. Bond downgrades also compel developing countries to pursue neoliberal reforms, endorsed by the CRAs, in an attempt to lift their ratings. The effects of tax, labor, and monetary policies, in particular, appear to enlarge disparities between the rich and the poor. Our research helps to identify the mechanism by which CRAs and globalization, more generally, impact wealth disparities in the developing world.

This paper explores the contribution of national institutions to the competitive transformation of big commercial banks in late industrializing countries through the analysis of the Spanish case. The paper uses a comparative historical analysis to establish that strategic coordination between the state and large banks is a structural feature of the banking sector but may be articulated differently depending on the balance of power between states, banks and industry, the preferences of these actors, and their resources. Using evidence from Spain since the late 1970s, the paper argues that in this country, state-bank coordination was articulated as a non-hierarchical system of negotiated interactions and mutual exchanges of benefits between small groups of decision-makers at the government, the central bank, and big banks. Under the Spanish model, large banks contributed to the fulfillment of public policy objectives to develop the central bank's capacity to conduct monetary policy, strengthen supervision of the banking system, and modernize the financial sector. In exchange, big banks benefited from a favorable regulation that enabled them to restructure, consolidate the leadership of a new generation of bankers, and reach the efficiency frontier of their industry. The paper contributes to the literature of institutionalism by questioning the traditional dichotomy between market and strategic coordination. It also contributes to the literature of competitiveness by stimulating debate about the role of the state in supporting the transformation of big business.

What factors explain U.S. participation in multilateral forums that govern finance? Current literature misses the key features of the Federal Reserve, Treasury, and Congress that result in their distinct manners of support for various multilateral arrangements. I revisit the archival record and apply a new understanding to American participation in the Bank for International Settlements (BIS) and Basel Committee on Banking Supervision (BCBS) as the financial regime has evolved since the collapse of fixed parity in the IMF after 1971. I thus explain the puzzle of American ambivalence through an exploration of the fragmented U.S. regulatory system, which inhibits the United States from acting as a unitary, lead actor of multilateral negotiations. Hence, American coordination must take place both domestically and internationally for an agreement to emerge.

Since deregulation in 1980, there has been a major shift in antitrust enforcement to the states, specifically to state attorneys general (AGs). For advocates of deregulation, this move has had important unintended consequences. Specifically, it has allowed antitrust litigation to become hitched to the political incentives of AGs. Analysis of a panel dataset of all state antitrust actions between 1990 and 2008 suggests that antitrust enforcement by state attorneys general appears to follow electoral cycles, which is especially pronounced depending on specific institutional constraints that exist between the states.

Firms and governments often negotiate economic development deals, such as tax abatements, with limited transparency, using exceptions to public records laws or other strategies for nondisclosure. In this article we explore the motivations of firms for keeping economic development deals out of the public eye. We explore legal challenges to public records requests for deal-specific, company-specific participation in a state economic development incentive program. By examining applications for participation in a major state economic program, the Texas Enterprise Fund, we find that a company is more likely to challenge a formal public records request if it has renegotiated the terms of the award to reduce its job-creation obligations. We interpret this as companies challenging transparency when they have avoided being penalized for noncompliance by engaging in nonpublic renegotiations. These results provide evidence regarding those conditions that prompt firms to challenge transparency and illustrate some of the limitations of safeguards such as clawbacks (or incentive-recapture provisions) when such reforms aren't coupled with robust transparency mechanisms. We speculate that the main motivation for these challenges is to limit scrutiny of these deals that could lead to backlashes against future economic development agreements.

Firms that offshore final production should oppose trade barriers “protecting” their own industry. This pits them against onshore firms, especially when comparative disadvantage is most pronounced, and so fundamentally alters trade policy coalitions. The US-China trade war's exclusion process, where US firms could request that tariffs not be applied to a product, provides a golden opportunity to test this contention. We show that coverage by a tariff in the trade war and firm characteristics associated with offshoring—size, multinationality, and heavy imports from China—interacted to generate firm requests for exclusion from the trade war's tariffs. This finding is robust to input-sourcing and fears of export retaliation as alternative explanations, and across multiple measures of firm size, tariff coverage, and exclusion requests. We therefore test a key piece of the firm-centered model of trade politics and show its value in interpreting the US-China trade war.

The existing literature in public policy has commented mostly on mature and established businesses, leaving the relationships between entrepreneurial businesses and public policies less explored. Relying on qualitative research methods and quantitative surveys, we examine how managers in an intensively regulated entrepreneurial setting assessed the desirability of public policies. We show that managers in the regulated energy efficiency and renewable (EERE) business sector in the 1990s tended to view public policies favorably only if they lacked control over the business environment. The less control they perceived they had over the business environment, the more favorably they tended to view public policies. Our findings suggest that managers in a regulated entrepreneurial setting tend to view public policies as substitutes for their efforts to control their business environment, not as complements, as studies of mature and established companies in regulated settings commonly find. However, we also find some evidence to suggest these perceptions may evolve, as a business experiences greater success attracting customers.

This article systematically examines how access of business groups and nongovernmental organizations (NGOs) to the executive branch of the European Union varies across political heads, civil servants, and an understudied yet critical intermediary figure of the executive branch: political advisers. Building upon exchange theory, we argue that the occurrence of a meeting between public officials and interest groups depends on information and legitimacy sought and offered by both types of actors, the public officials’ public exposure, and the interest groups’ lobbying strategies. The empirical analysis is focused on the executive body of the European Union (i.e., the European Commission). Our results show that, while political advisers and civil servants are more likely to meet with business groups than with NGOs, political heads are not biased in favor of any of these two groups.

Private firms are increasingly being regarded as moral agents of their stakeholders and the broader public. Stakeholders can use different types of evaluation organizations to monitor this division of moral labor, but must also monitor the credibility of this second layer of moral agents. This paper uses agency, signaling, and legitimacy theory to develop a novel conceptual framework showing how both firms and evaluation organizations send signals of their credibility as moral agents to earn grants of legitimacy from their moral stakeholders. The paper also describes how three specific characteristics of ratings and certifications – transparency, expertise, and independence – may signal different forms of credibility, appeal to particular stakeholder groups, and elicit different forms of legitimacy. A content analysis of the websites of 245 eco-labels, sustainability ratings and other forms of environmental evaluations reveals the multi-dimensional nature of these three characteristics, and finds that transparency is the most commonly-sent signal of credibility, followed by independence and then expertise. These results highlight the complexity of existing signals of credibility, and suggest several strategies – including voluntary credibility standards and a virtual information marketplace – that both private and public actors can pursue to improve the quality and accessibility of these signals of credibility.

In recent decades, both South Korea and Taiwan have made remarkable leaps in the development and production of semiconductors-the core element in burgeoning global telecommunications, computer, and computer equipment industries. Although many aspects of their sectoral industrial strategies have differed, both countries are now moving aggressively to adapt their semiconductor industries to turbulent global markets. In the wake of the severe regional financial crisis that began in 1997, this case study compares and contrasts continuing processes of adaptation among primary semiconductor manufacturers in the two countries. The crisis had observable effects, especially in Korea, but it was not deep enough to force fundamental adjustments in either country. In the early days of the industry in both places, a sense of vulnerability-the need to come from behind-gave rise to quite different corporate structures and attendant strategies. Remarkable differences persist in the ways in which the South Korean and Taiwanese semiconductor firms are seeking new advantages in rapidly changing regional and global markets. Strategic change and structural continuity mark the attempt of two relatively small countries to stay competitive in a key industry.