Global Capitalism, FDI and Competitiveness

Global Capitalism, FDI and Competitiveness

The Selected Essays of John H. Dunning, Volume II

John H. Dunning

Global Capitalism, FDI and Competitiveness comprises 15 of John Dunning’s most widely acknowledged writings on the changing characteristics of the global economy over the past three decades. In particular, it examines how these events have shaped, and been shaped by, the growing internationalization of all forms of business activity.

Chapter 1: International Business in a Changing World Environment

John H. Dunning

Subjects: business and management, international business


* INTRODUCTION In this chapter, we consider some aspects of the interface between international business – primarily in the guise of the MNE – and the governments of the countries which are host to its activities, within a changing world economic and political scenario. The chapter sets out to examine why, how and in what ways this interface has been shaped by, or has shaped, the events of the past 25 years, and speculates a little about the prospects for the remainder of the twentieth century. ANTECEDENTS OF THE MNE The Multi-Plant Enterprise The MNE is the modern equivalent of the multi-plant domestic enterprise, which dates back more than a century. In particular, the years following the Civil War saw the transformation of many regional American corporations into national corporations, and the emergence of multi-plant establishments, under the same ownership, in different parts of the USA. And it is, perhaps, worth recalling that the spread of Northern US companies into the south was regarded by some observers at the time with almost the same suspicion and unrest as that exhibited more recently by some Southern (developing) countries towards international corporations from the Northern hemisphere. A useful starting point to any understanding of the modern MNE is to regard it as an extension of the domestic multi-plant firm (Caves, 1982). In both instances, a company seeking to service a market beyond its immediate catchment area must have some kind of advantage, which we shall call an ownership-specific advantage (Dunning, 1981, 1988a) over and above...

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