A New Agenda
Chapter 9: Relational Assets: The New Competitive Advantages of MNEs and Countries
INTRODUCTION Most paradigms and economic theories of the determinants of international business (IB) activities, and particularly those designed to explain the extent, composition and geography of foreign owned production, are essentially asset based. By assets, we mean the accumulated stock of the resources and capabilities of ﬁrms which, potentially at least, are capable of generating a future income stream and/or an augmentation to that stock. The IB literature1 usually distinguishes between three kinds of assets (see Table 9.1): 1. those specific and unique to particular multinational enterprises (MNEs),2 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 likewise be located in the home country of the MNEs or in foreign countries; 3. those which encompass the organizational form by which these two kinds of assets are harnessed, created and coordinated by the management of MNEs, whether exercised by the parent companies or by their foreign afﬁliates. As set out in Table 9.2, over the years, the content, relative signiﬁcance and governance of these different types of assets have changed. Until the industrial revolution, the critical wealth-creating assets were of two kinds. The ﬁrst consisted of land and property owned mainly by households, and the way in which these assets were husbanded. The second comprised the capital, entrepreneurship and markets owned, accessed or exploited...
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