Multinational corporations (MNCs) and Transnational Enterprises (TNEs) have always been
objects of interest to IPE scholars and practitioners. MNCs and TNEs were initially viewed as an
essential element of western Cold War strategy. The essence of the argument that was often
made was this: US and western-based international businesses were linked with their
governments by an "invisible handshake." The home country governments used their influence
to create opportunities and open markets abroad (in "host countries") for these businesses. The
businesses, in turn, acted in the economic and sometimes and political interests of the home
country. During the Cold War MNCs were often viewed as economic agents of their home
country governments and political agents of influence abroad.
With the end of the Cold War, analysis of MNC behavior quickly spread to issues well beyond
their role in Cold War geopolitics. The rise of the Asian NICs and the increasing globalization of
production and finance spurred research on the role of MNCs in the allocation of capital and the
control of technology. The presumed close links between MNCs and their home country
governments were increasingly called into question as MNCs undertook business strategies that
were not obviously in host country national interest. The distinction between home country and
host country also grew less clear. All countries are now host countries in the sense that all
countries compete for capital, technology, and jobs in the global market for multinational
investment.
As the locus of economic activity becomes less and less identified with the borders of nationstates,
research is being directed towards developing an IPE of Global Commodity Chains
(GCCs). GCCs are complex webs of global business that link independent businesses into a
coordinated production and distribution process. The expansion of GCCs has been accelerated by
the growth of the information economy, which allows independent firms to communicate and
coordinate their activities to an extent that was previously possible only within a large enterprise.
The Nike Corporations, for example, coordinates a vast GCC; it actually manufactures few of the
products it sells and focuses on design and marketing, not production. The Ford Motor Company
has expressed a vision of the future where it too is transformed into a marketing firm, selling
products that are mostly manufactured, assembled, and distributed by independent competitive
firms.
The analysis of global commodity chains represents another shift in IPE away from the
traditional concerns of International Relations. MNCs during the Cold War were seen as
extensions of the power of the home country. MNCs in the post Cold War period were often
analyzed in terms of their own power (especially financial and technological power) versus the
power that host country governments could bring to bear in negotiations with them. Susan
Strange, for example, encouraged IPE scholars to think of MNCs as states and explicitly to
consider MNC-state and MNC-MNC bargains and relations in their analysis.
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GCCs introduce a new element of complexity into this analysis. GCCs gain and exercise
power through their ability to mobilize and coordinate global market forces. They are not,
therefore,
distinct centers of power, as MNCs are sometimes considered, comparable to a state if different
from it. And yet it is difficult to resist the impulse that power is there. The developing IPE of
global commodity chains challenges our understanding of both markets and of states and
represents an advancing frontier of IPE research.