New Horizons in International Business series
Edited by Jean-Louis Mucchielli and Thierry Mayer
Chapter 9: Empirical evidence on the strategic behaviour of US MNEs within the framework of dynamic differentiated networks
9. Empirical evidence on the strategic behaviour of US MNEs within the framework of dynamic diﬀerentiated networks Fragkiskos Filippaios, Constantina Kottaridi, Marina Papanastassiou and Robert Pearce 9.1 INTRODUCTION One of the seminal contributions towards a realistic understanding of the global economy of the past half-century belongs to Hymer (1960) who challenged the existing theories of foreign direct investment (FDI)1 with his empirical analysis. The main claim of these theories was that FDI would ﬂow from capital abundant, and hence low rate of return on capital, countries, to capital poor, thus high rate of return countries. According to this argument FDI would be expected to ﬂow mainly from developed to developing countries on the one hand, while on the other hand most countries would be almost exclusively either exporters or recipients of FDI capital. What Hymer demonstrated with his investigation of the immediate postwar period was that FDI was a two-way ﬂow among advanced economies and that most countries (even the USA) were both recipients and providers of FDI capital. An exclusively macro-level theory of FDI as being determined only by relative capital availability seemed inadequate. Conceptual thinking in explaining this newly observed behaviour added two new elements in the relevant literature. First, that ﬁrms carrying out FDI were doing so not just by being motivated by capital considerations, but also as a way of utilizing more eﬀectively other, more ﬁrm-speciﬁc, sources of competitiveness (technology, marketing and managerial expertise). Secondly, those foreign investors were often making their...
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