Multinational Corporations: Emergence and Evolution

Multinational Corporations: Emergence and Evolution

Multinational Corporations: Emergence and Evolution

Multinational Corporations: Emergence and Evolution

Synopsis

This work presents case studies of the emergence and evolution of MNCs based in 11 developed and developing countries of divergent patterns of national development.

Excerpt

In 1991, John Cantwell argued that there are four frameworks in which to analyse the major theories of international production: the microeconomic approach which examines the international growth of individual firms or multinational corporations (MNCs), the mesoeconomic approach which considers the interaction between firms at an industry level, the macroeconomic approach which studies broad national and international trends, and the eclectic paradigm which is not an alternative analytical framework but an overall organizing paradigm which incorporates elements from all the other three types of approaches (Cantwell, 1991). The various theoretical strands comprising the macroeconomic development approach to international production are the earliest version of the product cycle model (PCM Mark I) of Vernon (1966); the integrated theory of trade and direct investment of the Japanese economists, Kojima (1973, 1978) and Ozawa (1982); the concept of an investment-development cycle and path of Dunning (1982); and the stages-of-development approach associated with Tolentino (1993) and Cantwell and Tolentino (1990). However, although the origins of the more modern macroeconomic theories of international production could be traced to the mid-1960s with the formulation of the PCM Mark I, the current stage of development of this set of theories is regarded to be more rudimentary by comparison to the microeconomic or mesoeconomic theories whose origins can be traced similarly to the 1960s. This is owing partly to the demise of the PCM as an analytical tool to explain the more balanced process of technological competition between the United States, Europe and Japan over the last 35 years away from the previous technological hegemonic role of the United States during Pax Americana (Giddy, 1978; Vernon, 1979; Tolentino, 1993) and the more industry-based as opposed to country-based theory of trade and direct investment developed by Kojima couched in the neoclassical Hecksher-Ohlin-Samuelson theory of trade. In addition, although the advancement of more general macroeconomic theories of international production began with the elaboration of the concept of an investment-development cycle of international production by Dunning (1982)

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