ATTACKED FROM BOTH SIDES: A DYNAMIC MODEL OF MULTINATIONAL CORPORATIONS’ STRATEGIES FOR PROTECTION OF THEIR PROPERTY RIGHTS
Description
Beginning in the 1990s, the world seemed to tell multinational corporations (MNCs) that the times of challenges to their property rights through actions such as expropriations had ended. MNCs involved in business with significant investments in immobile fixed assets such as mining, petroleum, or infrastruc- ture had been particularly affected by a wave of government expropriations in the 1960s and 1970s (Jones, 2005; Kobrin, 1980; Wilkins, 1974). The fall of the Soviet bloc, China’s insertion in the world economy, and the abandonment of protectionism in Latin America and Asia that came parallel to new foreign business-friendly policies in most countries
confirmed that perception (Fukuyama, 1992). Events taking place in the twenty-first century, however, proved any celebration of the end of expropriations premature. The 2008 financial crisis gave new impetus to the voices advocating for a return to pro- tectionism and resuscitated what were believed to be long-forgotten nationalist policies, particularly in industries in which MNCs had little mobility (The Economist, 2009). This was apparent with the cases of the expropriation of Brazilian-owned oil property in Bolivia in 2006, the Venezuelan expropriations under the late Hugo Chávez rule, and growing threats to foreign investors in the mining industries in Africa (Flores-Macías, 2012). In April 2012, the Argentinean government expropriated Spain’s Repsol properties using similar legal mechanisms as the ones used four decades before (The Economist, 2012). The return of expropriation policies, the com- plexity behind the processes leading to them, and the difficult strategic choices the most vulnerable MNCs face (i.e., those operating in the natural resource or infrastructure sectors) make it imperative for scholars to understand the political and historical issues that undergird this new expropriation wave.