Intersections between International Business and Public Policy

Ana T. Tavares

Ana Teresa Tavares-Lehmann
University of Porto, Portugal

Ari Van Aasche

Ari Van Assche
École des Hautes Études Commerciales Montréal, Canada

International business as exemplified by the cross-border flows of trade and investment has been front and center in recent policy discussions. On one side of the debate, anti-globalization pundits have argued that international business liberalization has been a disaster. It has facilitated the rise of authoritarian rivals such as China, it has devastated the American and European working classes, it has strengthened the political power of multinational firms, and it has contributed to global climate change. On the other side of the debate, pro-globalization commentators have focused on the benefits of international business liberalization. It has allowed countries to specialize their production activities, leading to a more efficient assignment of resources towards those sectors in which the country has a comparative advantage. It has allowed local firms to tap into foreign knowledge that is unavailable locally, allowing for technological spillovers that stimulate local innovation. And it has contributed to the reduction of poverty. In this polarized context, there is more than ever a need for nuanced academic research that studies the intersection between public policy and international business. Important questions are: How do public policy choices affect international business? Do they affect multinational enterprises differently than domestic firms? How does this affect the relation between international business enterprises and other stakeholders? What strategies do multinational firms use to influence public policy? In what circumstances can multinational firms collaborate with governments to develop welfare-improving institutions? And how do these relations change considering new global realities such as digitization?