IR453
Global Business in International Relations
Revision Pack
Weeks 3 · 4 · 5 · 7 · 8 · 11
Built from the official IR453 lecture slides (L3 Economic theories, L4 MNCs and states, L5
Investment treaties, L7 Tax, L8 Tech firms, L11 Human rights) and the matching WT
seminar slides (WT3, WT4, WT5, WT7, WT8, WT11).
How to use this pack: each week has (1) a one-page diagram of the topic, (2) the core
arguments and counter-arguments, (3) the named scholars, cases and dates you need to
drop into an exam answer, and (4) the actual seminar questions for that week.
,Contents
Section Topic
How to read this pack Symbols, structure, exam tactics
Week 3 — L3 Economic theories of the global firm
Week 4 — L4 Political economy of FDI: MNCs and states
Week 5 — L5 International investment treaties (BITs & ISDS)
Week 7 — L7 International tax governance
Week 8 — L8 Tech giants and how to govern them
Week 11 — L11 UN, CSR and human rights
Cross-cutting themes Patterns that link every week
Exam strategy Format, structure, what gets a high mark
IR453 — Revision Pack (Weeks 3, 4, 5, 7, 8, 11) p. 2
,How to read this pack
Every week is structured the same way so you can move through it fast:
• Diagram — the topic on one page.
• Core arguments — the theories or claims, plus their critics.
• Names, dates, cases — the evidence you cite in an answer.
• Seminar exam questions — the actual questions Julie set in the WT seminar for that week.
Symbols used
• KEY: a one-line take-away — memorise these.
• EXAM Q: the actual seminar question, suitable for exam practice.
• Source: … — which slide / author the point comes from.
Exam basics (from WT11 slides)
• Format: 2-hour exam, 6 questions, you answer 2.
• Make an argument, do not summarise scholars.
• Name authors, years, cases (e.g. 'Ruggie's framework suggests…').
• Go beyond the course: bring in outside cases, recent news, other readings.
• Avoid bullet points in the actual answer.
Source: WT11 seminar, slide 5
IR453 — Revision Pack (Weeks 3, 4, 5, 7, 8, 11) p. 3
, Week 3 — Economic theories of the global firm
KEY: Why do MNCs exist at all? Why internalise foreign operations instead of just trading? Six
theories try to answer this; each one is a response to the previous one's failure.
3.1 The big picture
THE PUZZLE
Why do firms internalise foreign operations instead of using markets (e.g. trade)?
NEOCLASSICAL HYMER (1960) PRODUCT CYCLE
FDI = portfolio decision MNC = market imperfection Vernon (1960s)
Ignores MNCs as distinct Need firm-specific advantage Export → imitators →
Heckscher-Ohlin to overcome foreign-op costs set up abroad to deter
LIMITATIONS in each row → drive the next generation of theory
INTERNALISATION ECLECTIC / OLI STRATEGIC (Porter)
Coase, Rugman, Buckley, Dunning
Casson, Hennart Ownership + Strategy picks: FDI /
Internalise to protect Location + alliance / outsourcing /
knowledge in imperfect mkts Internalisation = FDI licensing
Each row of theory tries to fix the limitations of the row above it.
Theories of the global firm — each row responds to the limits of the row above it.
3.2 Each theory: what it says, why it fails
Neoclassical / trade theory
• Initially ignored MNCs; assumed atomistic competition (Heckscher-Ohlin).
• FDI treated as just capital flowing to higher returns (interest-rate driven).
• Limitation: interest-rate differences do not predict FDI; MNCs use multiple finance sources;
manufacturing firms (not banks) do FDI.
Source: L3 slides 4–6
Hymer thesis (1960, published 1976)
• First industrial-organisation view of MNCs; economic logic + Marxist framing.
IR453 — Revision Pack (Weeks 3, 4, 5, 7, 8, 11) p. 4
Global Business in International Relations
Revision Pack
Weeks 3 · 4 · 5 · 7 · 8 · 11
Built from the official IR453 lecture slides (L3 Economic theories, L4 MNCs and states, L5
Investment treaties, L7 Tax, L8 Tech firms, L11 Human rights) and the matching WT
seminar slides (WT3, WT4, WT5, WT7, WT8, WT11).
How to use this pack: each week has (1) a one-page diagram of the topic, (2) the core
arguments and counter-arguments, (3) the named scholars, cases and dates you need to
drop into an exam answer, and (4) the actual seminar questions for that week.
,Contents
Section Topic
How to read this pack Symbols, structure, exam tactics
Week 3 — L3 Economic theories of the global firm
Week 4 — L4 Political economy of FDI: MNCs and states
Week 5 — L5 International investment treaties (BITs & ISDS)
Week 7 — L7 International tax governance
Week 8 — L8 Tech giants and how to govern them
Week 11 — L11 UN, CSR and human rights
Cross-cutting themes Patterns that link every week
Exam strategy Format, structure, what gets a high mark
IR453 — Revision Pack (Weeks 3, 4, 5, 7, 8, 11) p. 2
,How to read this pack
Every week is structured the same way so you can move through it fast:
• Diagram — the topic on one page.
• Core arguments — the theories or claims, plus their critics.
• Names, dates, cases — the evidence you cite in an answer.
• Seminar exam questions — the actual questions Julie set in the WT seminar for that week.
Symbols used
• KEY: a one-line take-away — memorise these.
• EXAM Q: the actual seminar question, suitable for exam practice.
• Source: … — which slide / author the point comes from.
Exam basics (from WT11 slides)
• Format: 2-hour exam, 6 questions, you answer 2.
• Make an argument, do not summarise scholars.
• Name authors, years, cases (e.g. 'Ruggie's framework suggests…').
• Go beyond the course: bring in outside cases, recent news, other readings.
• Avoid bullet points in the actual answer.
Source: WT11 seminar, slide 5
IR453 — Revision Pack (Weeks 3, 4, 5, 7, 8, 11) p. 3
, Week 3 — Economic theories of the global firm
KEY: Why do MNCs exist at all? Why internalise foreign operations instead of just trading? Six
theories try to answer this; each one is a response to the previous one's failure.
3.1 The big picture
THE PUZZLE
Why do firms internalise foreign operations instead of using markets (e.g. trade)?
NEOCLASSICAL HYMER (1960) PRODUCT CYCLE
FDI = portfolio decision MNC = market imperfection Vernon (1960s)
Ignores MNCs as distinct Need firm-specific advantage Export → imitators →
Heckscher-Ohlin to overcome foreign-op costs set up abroad to deter
LIMITATIONS in each row → drive the next generation of theory
INTERNALISATION ECLECTIC / OLI STRATEGIC (Porter)
Coase, Rugman, Buckley, Dunning
Casson, Hennart Ownership + Strategy picks: FDI /
Internalise to protect Location + alliance / outsourcing /
knowledge in imperfect mkts Internalisation = FDI licensing
Each row of theory tries to fix the limitations of the row above it.
Theories of the global firm — each row responds to the limits of the row above it.
3.2 Each theory: what it says, why it fails
Neoclassical / trade theory
• Initially ignored MNCs; assumed atomistic competition (Heckscher-Ohlin).
• FDI treated as just capital flowing to higher returns (interest-rate driven).
• Limitation: interest-rate differences do not predict FDI; MNCs use multiple finance sources;
manufacturing firms (not banks) do FDI.
Source: L3 slides 4–6
Hymer thesis (1960, published 1976)
• First industrial-organisation view of MNCs; economic logic + Marxist framing.
IR453 — Revision Pack (Weeks 3, 4, 5, 7, 8, 11) p. 4
