We investigate capital allocation across a firm's divisions that differ with respect to the degree of asset tangibility. We adopt an incomplete contracting approach where the outcome of potential debt renegotiations depends on the liquidation value of assets. However, with diversity in terms of...

Proposals for the reform of the taxation of cross-border income are evaluated within the general context of the corporate tax in an open economy. We focus on the various behavioral decisions that can be affected such as the location of income and its repatriation. The two income tax proposals...

In this paper we study interdependencies between corporate foreign investment and the capital structure of banks. By committing to invest predominantly at home, firms can reduce the credit default risk of their lending banks. Therefore, banks can refinance loans to a larger extent through...

This paper reviews the recent literature on the relocation of headquarters (HQs). Overall results show that full and direct international relocations of corporate HQs are rare events. However, there is a trend that MNEs increasingly unbundle their HQs so as to spread their different HQs...

Policymakers in developing countries have increasingly pinned their hopes on bilateral investment treaties (BITs) in order to improve their chances in the worldwide competition for foreign direct investment (FDI). However, the effectiveness of BITs in inducing higher FDI inflows is still open to...

Multinational enterprises play an important role in the transfer of technology into LDCs. The following article examines the various aspects of the transfer of technology and the attitude of multinational enterprises towards such transfers.

The uses and drawbacks of foreign capital and multinational enterprises have been discussed more thoroughly in the past few years also in Mexico. The Third World Trade Conference of 1972 (UNCTAD III), at which President Echeverría came forward with proposals designed to involve foreign...

In the context of the New International Economic Order (NIEO) the developing countries are expressing more and more frequently a wish for stricter control over the multinational enterprises. What should be the features of a Code of Conduct for Multinationals?

While voluntary behavior and social responsibility have so far played a peripheral role in multinational corporations’ global strategies, the author argues that the non-market social responsibility dimension will have to be incorporated systematically in management’s forward planning as a...

Do multinational enterprises act in developing countries as a motive force for progress or do they perpetuate colonialism by different means? The fierce controversy on this question still continues, fuelled not only by basic ideological differences but by dearth of empirical evidence. Prof....