Critically evaluate the view that, the global regulatory environment Essay

Critically evaluate the view that, the global regulatory environment and governance plays an important role on both the location and impact of Multinational enterprises - Essay Example Social economics puts emphasis on the dichotomous characteristic of the MNE, elaborated in the expression ‘making goods versus making money’ (Mcclintock 1999, 507) to examine the ways wherein clashes between these objectives may bring about social injustice. Usually this social disorder arouses collective action to remedy the inequality or discrimination, effectively mitigating the social harm of the MNE’s operations (Jones 2005). In this essay the role of global regulatory environment and governance on the location and impact of multinational enterprises is outlined. MNEs’ international investment and production is far-reaching. In 1997, roughly 53,000 MNEs and their foreign partners had an amassed direct foreign investment stock assessed at more than $3 trillion whilst the foreign partners’ international sales drew near to an approximated $9 trillion (Mcclintock 1999, 507). Global production has increased at a more rapid pace than global trade as suggested by sales of the foreign partners of MNEs increasing more rapidly than actual DFI investment and world exports as a share of international GDP surpassing increase in the proportion of imports and exports to GDP (Luo 2005). This globalisation of production has expanded the shared interdependence of regional and national markets. Due to the fact that transaction outlays may remain elevated in global exchange due to the incapability of attempts between private groups, such as corporate codes of conduct, or the government to achieve a ‘greater success’ in the interest of the general public, trials in supranational arbitration of conflicts have heightened (Kim, Prescott & Kim 2005). Two primary rationales for the growth of this governance are the integrative and technological necessities of contemporary life. The global technology transfer creates the demand for regulation and standardisation