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 11: The Competitive Advantages of Countries and MNE Activity

John H. Dunning

Subjects: business and management, international business


* INTRODUCTION The dynamic interplay between the competitive advantages of countries and those enterprises of a particular nationality is a subject commanding the increasing attention by students of the MNE. Indeed, it has been suggested that a fuller understanding of the nature, content and determinants of this interaction, as it affects the globalization of production and markets, may provide the basis for one of the next advances in the theory of foreign value-added activity1 (Dunning, 1990). Since the mid-1970s, the focus of scholars interested in explaining the existence and growth of the MNE has been directed to identifying and evaluating the relative costs and benefits of organizing the cross-border transactions of intermediate products by hierarchies or markets. In the early 1990s, however, renewed attention2 is being given to explaining the origin and composition of the resources and capabilities3 of corporations to engage in production outside their national boundaries and to the determinants of their success in managing and organizing the international portfolio of resources rather than ownership or control. Faced with the same economic conditions and prospects, why are some firms significant global players and others are not? Why is the share of international direct investment accounted for by Japanese companies rising so rapidly? Why is Europe claiming a larger share of US based MNE activity than it used to? What explains the rapid growth of the participation of foreign owned firms in the United States? What determines which developing countries will emerge as important international investors? Why do firms conclude...

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