The purpose of this paper is to respond to the comments by professor Ietto-Gillies on the paper on “The MNE as the Crown of Creation?”
The authors argue that the key points made in the commentary are broadly complementary to the arguments set out in the “Crown of Creation?”
The authors agree with the commentary that sources of advantages of multinationality lie “outside the MNE” – through its interactions with national governments and organised labour. However, the authors would caution that the achievement of such advantages may encounter constraints.
The original paper (“The MNE as the Crown of Creation?”) was a critique of mainstream theories of the MNE regarding the assumed superiority of the MNE. The response to the paper makes the argument that any superiority associated with MNE must be sought in its interactions with other actors.
The argument suggests that MNE managers seeking to exploit the advantage of multinationality through production shifting must be aware of the system-wide consequences of such actions.
Given the conceptual nature of the argument and the level of abstraction, solid social implications can only be drawn tentatively.
The key novelty in the response paper is the possible negative effect – for MNEs – of unconstrained exercise of production shifting.
