Multinational Enterprises and Tort Liabilities
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Multinational Enterprises and Tort Liabilities

An Interdisciplinary and Comparative Examination

Muzaffer Eroglu

This book conducts an interdisciplinary and comparative examination of tort liabilities of multinational enterprises (MNEs). In the first part, it examines the social, economic, managerial and legal characteristics of MNEs and compares the findings of this examination to the current understanding of MNEs in the way that tort liability is applied to them. In the second part, the book examines the existing laws and principles related to liability of MNEs from a variety of jurisdictions with the aim of assessing whether these laws are adequate for the challenges that modern MNEs create. In the final part, Muzaffer Eroglu proposes solutions to the problems of tort liability of MNEs.
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Chapter 1: Social and Economic Analysis of Multinational Enterprises

Muzaffer Eroglu


Introduction A multinational enterprise can be defined as an enterprise that has affiliates in more than one country. On the other hand, an MNE, in a strictly legal sense, can be defined as a collection of corporate entities, each having its own juridical identity and national origin, but each in some way connected by a system of centralized management and control, normally exercised from the seat of primary ownership.1 This definition does not exist in any statute or in any official documents. According to some researchers, MNEs have existed since ancient times.2 They come to the conclusion, after researching ancient business history that MNEs were actively operating in the times of Roman, Greek, Mesopotamian and Anatolian civilizations. The first recorded MNEs appeared in the Old Assyrian Kingdom shortly after 2500 BC, when Sumerian merchants found in their foreign commerce that they needed men stationed abroad to receive, to store and to sell their goods. The researchers found that the MNEs of ancient times have some similar characteristics to contemporary MNEs. On the other hand, some other researchers find the forerunners of MNEs in medieval times in chartered trading colonizing enterprises.3 For example the East India Company, chartered in London in 1600, established overseas branches. In the mid-17th century, English, French and Dutch merchant families sent relatives to America and to the West Indies to represent their firms. So too, in time, American colonists found in their own foreign trade that it was desirable to have correspondents, agents, and, on circumstance,...

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