Theories and Paradigms of International Business Activity
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Theories and Paradigms of International Business Activity

The Selected Essays of John H. Dunning, Volume I

John H. Dunning

This volume contains a selection of John Dunning’s best known and highly acclaimed writings on the theory of international business activity. Spanning more than three decades, the 16 contributions trace the evolution of his thoughts and ideas as an economist, from his first article on the determinants of international production, published in 1973, to his most recent essay on relational assets, networks and global business activity, completed in 2002.
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Chapter 16: Relational Assets, Networks and International Business Activity

The Selected Essays of John H. Dunning, Volume I

John H. Dunning


* 1. INTRODUCTION Most paradigms and theories of the determinants of international business activities – and particularly those designed to explain the extent, pattern and composition of MNE systems – are essentially asset based. Three kinds of income generating assets are usually considered: 1. Those specific and unique to particular firms, notably MNEs or potential MNEs: these may be located in the home country of the MNEs, or in the countries which are host to their affiliates. 2. Those which are external to MNEs, but are accessed and then deployed by them: these assets may also be located in the home country of the MNEs or in foreign countries. 3. Those which relate to the ways in which these two kinds of assets are created, harnessed and coordinated by the management of MNEs – be they that of the parent companies or their foreign affiliates. Over the years the nature, relative significance and governance of these different types of assets has changed (Table 16.1). Until the Industrial Revolution, and today in some developing countries, the critical wealth-creating assets were (and are) land and property owned by households, and the way in which these assets were (are) husbanded. For much of the nineteenth and twentieth centuries, they were the physical and financial assets owned by firms, but supplemented by those of other institutions, and accessed primarily through the market. Today, the critical assets consist of a kaleidoscope of intangible assets, especially knowledge and information embodied in human capital, both owned and accessed – from a variety...

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