%0 Book %1 Vernon:1971a %A Vernon, Raymond %B Sovereignty at Bay: The Multinational Spread of U.s. Enterprises %C New York %D 1971 %I Basic %K firm mnc %P x, 326 %T Sovereignty at bay: The multinational spread of U.S. enterprises %X The central picture portrayed in the book is one of an incipient clash between two strong systems --- a system of nation-states responding to the imperatives of its citizens, and a system of enterprises reacting to the increasing opportunities induced by technological change. The outcome could prove destructive if an international response to the clash was not developed. Vernon argues there are two institutions, both legitimate, that come into conflict because of the differences in their goals, jurisdictions and responsibilities. The MNE's goals are narrow (profit maximization) while the nation state's goals are broad (economic, sociocultural and political). The MNE's jurisdiction is global while the state is confined to its national borders. The MNE is responsible to its shareholders, the state to its citizens. Each institution is legitimate inside its own sphere of influence, with one power-based asymmetry: the nation state confers institutional legitimacy on the MNEs within its borders. Thus, Vernon sees inevitable MNE--state conflicts, with each party ``at bay''. In Sovereignty at Bay, Vernon focuses on the economic, social and political consequences of foreign direct investment (FDI) for home and host countries. Along the way, he introduces new topics that have now become so well known they have spawned whole shelves of library books and journal articles in their own right: the obsolescing bargain in the natural resource sector, the problems of international taxation and transfer pricing, and the issue of overlapping jurisdictions and extraterritoriality. His policy proposals offer a ``choice of futures'' (p. 248) directed at reducing MNE--state conflicts: unitary taxation of MNEs, joint policy harmonization by home and host governments in areas of overlapping jurisdiction, and more and better disclosure of MNE affairs. Overall, he concludes that the basic asymmetry between MNEs and nation states requires these enterprises be accountable to an international organization that can develop multilateral rules for regulating multinationals and adjudicating MNE--state conflicts.

@book{Vernon:1971a, abstract = {The central picture portrayed in the book is one of an incipient clash between two strong systems --- a system of nation-states responding to the imperatives of its citizens, and a system of enterprises reacting to the increasing opportunities induced by technological change. The outcome could prove destructive if an international response to the clash was not developed. Vernon argues there are two institutions, both legitimate, that come into conflict because of the differences in their goals, jurisdictions and responsibilities. The MNE's goals are narrow (profit maximization) while the nation state's goals are broad (economic, sociocultural and political). The MNE's jurisdiction is global while the state is confined to its national borders. The MNE is responsible to its shareholders, the state to its citizens. Each institution is legitimate inside its own sphere of influence, with one power-based asymmetry: the nation state confers institutional legitimacy on the MNEs within its borders. Thus, Vernon sees inevitable MNE--state conflicts, with each party ``at bay''. In Sovereignty at Bay, Vernon focuses on the economic, social and political consequences of foreign direct investment (FDI) for home and host countries. Along the way, he introduces new topics that have now become so well known they have spawned whole shelves of library books and journal articles in their own right: the obsolescing bargain in the natural resource sector, the problems of international taxation and transfer pricing, and the issue of overlapping jurisdictions and extraterritoriality. His policy proposals offer a ``choice of futures'' (p. 248) directed at reducing MNE--state conflicts: unitary taxation of MNEs, joint policy harmonization by home and host governments in areas of overlapping jurisdiction, and more and better disclosure of MNE affairs. Overall, he concludes that the basic asymmetry between MNEs and nation states requires these enterprises be accountable to an international organization that can develop multilateral rules for regulating multinationals and adjudicating MNE--state conflicts.}, added-at = {2010-03-02T17:25:53.000+0100}, address = {New York}, author = {Vernon, Raymond}, biburl = {https://www.bibsonomy.org/bibtex/20b3d105eec6d5cd90f7123bebe3b93e8/jrennstich}, booktitle = {Sovereignty at Bay: The Multinational Spread of U.s. Enterprises}, date-modified = {2010-02-28 22:43:33 -0500}, interhash = {d004af24d614d61b8a7a9a713fa37e0e}, intrahash = {0b3d105eec6d5cd90f7123bebe3b93e8}, keywords = {firm mnc}, pages = {x, 326}, publisher = {Basic}, timestamp = {2010-03-04T22:32:23.000+0100}, title = {Sovereignty at bay: The multinational spread of {U.S.} enterprises}, year = 1971 }