An Imperfect Competition Theory of the MNE

Grosse, Robert

doi:10.1057/palgrave.jibs.8490442

Cited by 23 publications

(9 citation statements)

References 25 publications

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“…Each foreign market entry mode has advantages and disadvantages in terms of risk, cost, control and return in serving a foreign market (Anderson and Gatignon, 1986;Grosse, 1985;Hirsch, 1976;Root, 1987). The comparison between foreign production and exporting with respect to the risk-return/cost-control trade-offs can be summarized as follows:…”

Section: Risk-return Trade-offsmentioning

confidence: 99%

“…Since risk and control are related to a firm's costs and returns of doing business in a foreign market, the risk-return/cost-control trade-offs model is offered as an explanation of a firm's behaviour of maximizing profit by choosing the optimal entry mode for a desired foreign market (Grosse, 1985). According to Horst (1974), exporting is preferred initially; but as time passes and a foreign market expands, the firm will establish a producing subsidiary in the foreign country to achieve maximum profits.…”

Section: Profit Maximization Via Optimal Entry Mode Choicementioning

confidence: 99%

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Impact of Host Country Market Characteristics on the Choice of Foreign Market Entry Mode

Yung-Chul¹,

Konopa²

1993

International Marketing Review

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If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation.

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Section: Risk-return Trade-offsmentioning

confidence: 99%

Section: Profit Maximization Via Optimal Entry Mode Choicementioning

confidence: 99%

Impact of Host Country Market Characteristics on the Choice of Foreign Market Entry Mode

Yung-Chul¹,

Konopa²

1993

International Marketing Review

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“…Ricardo's (1817) theory was also flawed because it was based on the assumptions of two countries, two products and perfect factor (labour and capital) mobility, but still did not justify international capital movements (Kindelberger, 1969). Other well-known scholars to theorise FDI include Mundell (1957), Vernon (1966), Casson (1979), Rugman (1980), Calvet (1981), Kojima and Ozawa (1984), and Grosse (1985). Although some of these researchers made a concerted effort to incorporate capital, location, industrial organisation, growth of the firm, market failure, foreign exchange parity, investment portfolio and product lifecycle theories into one whole theory to attempt to explain the motives and patterns of FDI, most credit is given to Dunning's eclectic paradigm (theory) of international production (Boddewyn, 1983).…”

Section: Literature Reviewmentioning

confidence: 99%

FDI and FPI Determinants in Developing African Countries

Makoni¹

2018

JEBS

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We examine drivers of foreign direct investment (FDI) and foreign portfolio investment (FPI) in nine selected African economies, during the period 1980 to 2014, with particular interest in the role of financial market development. We set out to explore the drivers of FDI and FPI in selected African countries, respectively. We employ the dynamic GMM methodology to assess the motivators of inward foreign flows. The results show that FDI inflows are generally dependent on past inflows of FDI, low inflation, infrastructural development, and real GDP growth rate; while stock market capitalisation, commercial bank assets gauged against commercial and central bank assets as well as domestic credit to the private sector by banks intermediate for financial market development. On the other hand, we find that FPI inflows are attracted to foreign destinations due to previous FPI inflows, the real exchange rate, inflation rates and the presence of developed infrastructure. Further, developed financial markets, as proxied by stock market capitalisation, were found to significantly and positively influence inward FPI flows, while a closed financial account and low interest rate discouraged FPI. The significant contribution of this paper is that its findings empirically confirm FDI and FPI theory, as postulated in Dunning’s eclectic paradigm insofar as the main “location” variables that enhance host country attractiveness are concerned, specifically in the African context. In light of these findings, we recommend that policy makers strengthen their domestic markets, complemented by appropriate regulations and institutions to attract foreign investment flows, while reducing their dependency on international aid and loans.

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“…There is also need for formal modeling of the MNE as an organizational mechanism and/or choice of modality of resource transfer. Again some progress has been made by Grosse (1985), Casson (1985) and Horstman and Markussen (1986), but more work requires to be done. Finally, there is need for a more systemic approach to examining the strategic behavior of MNEsusing, for example, such tools as game theoretic and network analysis.…”

Section: A More Formal Modeling Of the Paradigmmentioning

confidence: 99%

The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions

Dunning¹

2002

Theories and Paradigms of International Business Activity

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This article reviews some of the criticisms directed towards the eclectic paradigm of international production over the past decade, and restates its main tenets. The second part of the article considers a number of possible extensions of the paradigm and concludes by asserting that it remains "a robust general framework for explaining and analysing not only the economic rationale of economic production but many organisational and impact issues in relation to MNE activity as well." * John H. Dunning is currently Seth Boyden Distinguished Professor of International Business at Rutgers University. On return to the University of Reading in 1988, he will take up an ICI Research Professorship in International Business. Comments on an earlier draft of this paper by Mark Casson, John Cantwell and three anonymous referees are gratefully acknowledged.

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An Imperfect Competition Theory of the MNE

Cited by 23 publications

References 25 publications

Impact of Host Country Market Characteristics on the Choice of Foreign Market Entry Mode

Impact of Host Country Market Characteristics on the Choice of Foreign Market Entry Mode

FDI and FPI Determinants in Developing African Countries

The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions

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