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Economics of International Business

A New Research Agenda

Mark Casson

Economics of International Business sets out a new agenda for international business research. Mark Casson asserts that it is time to move the subject on from sterile debates about transaction cost economies and resource-based theories of the firm. Instead of focusing on the individual firm, the new agenda focuses on the global systems view of international business. A static view of the firm’s environment is replaced by a dynamic view which highlights the volatility of the international business environment. Coping with volatility requires entrepreneurial skills, flexibility and the need to synthesize information on a global basis. To co-ordinate the global system properly, entrepreneurs must co-operate through social networks of trust, as well as competing. Constructing a network of joint ventures, it is argued, is simply not enough.
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Chapter 10: Conclusion: Methodological Issues in International Business

Mark Casson


with Sarianna M. Lundan 10.1 INTRODUCTION This book has outlined a new research agenda for international business studies. It has focused on economic aspects of the subject, although its implications are more far-reaching than that. Quite how far-reaching they are is one of the issues addressed in this chapter. The new research agenda is radical in the sense that it involves four major changes in approach. These changes were outlined in Chapter 1 and are explained in more detail below (Section 10.2). They involve switching from a relatively static, partial, deterministic and narrowly economic view of IB to a more dynamic systems-oriented view in which the impact of volatility is fully recognized. The new approach shows how entrepreneurial activity generates flexibility within the global system, and explains how social as well as economic factors govern the way in which the system evolves. The global systems view set out in this book is not the only way of approaching the modelling of IB, however. For example, Whitley (1992a, b) has articulated a competing view of IB using his theory of national business systems. Similarly, Porter (1990, 1991) has set out his views on IB by extending his ideas on competitive strategy. Thus there is strong competition between rival models. A long-standing source of competition in IB modelling derives from the different disciplines represented in the subject. The approach adopted in this book builds on the foundations of economic theory. In many cases, rival approaches are based on other disciplines. Thus Whitley...

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