The Subjects of International Economic Law 马冉.ppt

The Subjects of International Economic Law By Maran Definition and Types The subjects of international economic law mean the legal persons that can enjoy the rights and implement the obligations in the international economic relationship. There are many different types of subjects of international economic law. And the most distinctive are transitional corporations or called multinational corporations and international economic organizations. Transitional Corporations What do you think a MNC(Sometimes referred to as “multinational corporations”) is? Why firms become multinational? What do you think a MNC is? A corporation that has its facilities and other assets in at least one country other than its home country. In 1969 a famous economist Howard Perlmutter wrote: “multinational corporation is a new kind of institution - a new type of industrial social achitecture particularly suitable for the latter third of the twentieth century.” And “This type of institution could make a valuable contribution to world order and conceivably excercise a constructive impact on the nation-state” Why firms become multinational? The OLI Paradigm O = Ownership L = Location I = Internalization Ownership The firm that invests abroad has a competitive advantage (to exploit) and out-compete the firms that operate in the country where the investment is done. Economies of scale connected to large-sized company Possess technologies that give an advantage on the subsidiary abroad Monopolistic advantages in terms of privileged access to inputs or outputs markets Skills of management Location Advantages of the foreign location: Different nations have different factor endowments: Natural resources: Cheap labour force Skills and capabilities Country characteristics (political stability, regulations, cultural distance) Internalization Internalization occurs when a firm expands its operations in another country, by acquiring the property of the assets that are abroad. Ownership of foreign