Pauly and Reich: National Structures and Multinational Corporate Behavior

LW Pauly and S Reich, “National structures and multinational corporate behavior: enduring differences in the age of globalization,” International Organization 51, no. 01 (2003): 1-30.

Many make the case that globalization is changing the world's political economy. If this is truly the case, one would expect to see a set of converging practices among leading multinational firms. However, this is not necessarily played out by prevailing evidence. "...this article shows that MNCs continue to diverge fairly systematically in their internal governance and long-term financing structures, in their approaches to research and development...as well as in the location of core R&D facilities, and in their overseas investment and intrafirm trading strategies" (1).

Standard arguments about firm convergence are explored.

"But we argue that the underlying nationality of the firm remains the vitally important determinant of the nature of its adaption...there remain systematic and important national differences in the operations of MNCs--in their internal governance and long-term financing, in their R&D activities, and in their intertwined investment and trading strategies" (4).

There is then much evidence provided to support this thesis.