The Global Factory
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The Global Factory

Networked Multinational Enterprises in the Modern Global Economy

Peter J. Buckley

This key new book synthesises Peter Buckley's work on ‘the global factory’ – the modern networked multinational enterprise. The role of interfirm networks, entrepreneurship and cooperation in the creation and management of global factories leads to a discussion of their governance, internal knowledge transfer strategies and performance, including their role in potentially combating societal failures. Emerging country multinationals are examined as a special case of global factories with a focus on Indian and Chinese multinationals, their involvement in tax havens and offshore financial centres, the performance and processes of their acquisition strategies – all seen as key aspects of globalisation.
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Chapter 9: Is Competitive Advantage a Necessary Condition for the Emergence of the Multinational Enterprise?

Networked Multinational Enterprises in the Modern Global Economy

Niron Hashai and Peter J. Buckley

Abstract

This article challenges the view that competitive adantage is a necessary condition for the emergence of the multinational enterprise. It formally derives the conditions under which multinational enterprises may emerge without possessing a competitive advantage vis-a-vis their rivals. This counterintuitive argument is based on three insights: (1) the ability of a larger number of disadvantaged home country entrepreneurs to enroll workers in the host country more efficiently than a smaller number of advantaged host country entrepreneurs; (2) asymetric liability of foreignness for home and host country entrepreneurs; and (3) the ability of location and internalization advantages to substitute for ownership advantage.

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