Abstract
This chapter compares and contrasts the theory expounded in Chapter 2 with alternative theories of the MNE. Our review is confined to theories which focus on the impact of the market environment on the multinationalism of individual firms. Questions concerning the aggregate impact of multinationalism on trade and investment flows are not considered.
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Notes
The seminal work is S. Hymer, ‘The International Operations of International Firms: A Study of Direct Investment’, unpublished Ph.D. dissertation, Massachusetts Institute of Technology, 1960.
C. P. Kindleberger, American Business Abroad (New Haven, 1969), p. 14.
H. G. Johnson, ‘The Efficiency and Welfare Implications of the International Corporation’, in The International Corporation, ed. C. P. Kindleberger (Cambridge, Mass., 1970).
See R. Z. Aliber, ‘A Theory of Direct Investment’, in The International Corporation, ed. C. P. Kindleberger (Cambridge, Mass., 1970), pp. 17–34; and The Multinational Enterprise in a Multiple Currency World’, The Multinational Enterprise, ed. J. H. Dunning (London, 1971), pp. 49–56.
R. E. Caves, ‘International Corporations : the Industrial Economics of Foreign Investment’, Economical 38 (1971), 1–27.
This theory is implicit in several recent works on the MNE. For an early development of these ideas see E. A. G. Robinson, ‘The Problem of Management and the Size of Firms’, Economic Journal, 44 (1934), 242–57.
R. Vernon, ‘International Investment and International Trade in the Product Cycle’, Quarterly Journal of Economics, 80(1966), 190–207.
See G. C. Hufbauer, ‘The Impact of National Characteristics and Technology on the Commodity Composition of Trade in Manufactured Goods’, in The Technology Factor in International Trade, ed. R. Vernon (New York, 1970), 145–213; and
L. T. Wells, The Product Life Cycle and international Trade (Cambridge, Mass., 1972).
J. J. Servan-Schreiber, The American Challenge (translated by R. Steel) (London, 1968).
J. K. Galbraith, The New Industrial State (London, 1967).
R. Vernon, Sovereignty at Bay (London, 1971); and ‘The Location of Economic Activity’, in Economic Analysis and the Multinational Enterprise, ed. J. H. Dunning (London, 1974), pp. 89–114.
Similar views are expressed in R. Rowthorn, International Big Business, 1957–67 (Cambridge, 1972).
F. T. Knickerbocker, Oligopolistic Reaction and the Multinational Enterprise (Cambridge, Mass., 1973).
See J. Von Neumann and O. Morgenstern, Theory of Games and Economic Behaviour, 2nd ed. (Princeton, 1947), ch. 14, p. 17.
Y. Aharoni, The Foreign Investment Decision Process (Cambridge, Mass., 1966).
G. V. G. Stevens, ‘The Determinants of Investment’, in Economic Analysis and the Multinational Enterprise, ed. J. H. Dunning (London, 1974), pp. 47–88.
J. H. Dunning, ‘The Determinants of International Production’, Oxford Economic Papers, 25 (1973), 289–336.
G. V. G. Stevens, ‘Capital Mobility and the International Firm’ and M. F. J. Prachowny, ‘Direct Investment and the Balance of Payments of the United States’, both in International Mobility and Movement of Capital, eds. F. Machlup, W. S. Salant and L. Tarshis (New York, 1972).
H. M. Markowitz, Portfolio Analysis (New Haven, 1970).
For further details see H. G. Grubel, ‘Internationally Diversified Portfolios’, American Economic Review, 58 (1968), 1299–1314.
For a recent survey see J. R. Wildsmith, Managerial Theories of the Firm (London, 1973).
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© 1976 Peter J. Buckley and Mark Christopher Casson
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Buckley, P.J., Casson, M. (1976). Alternative Theories of the Multinational Enterprise. In: The Future of the Multinational Enterprise. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-02899-3_3
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DOI: https://doi.org/10.1007/978-1-349-02899-3_3
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