Modes of Entry and Internalisation, International Economics

Assignment Help:
Although the elegance and comprehensiveness of transactions costs reasoning has provided the internalisation approach with a powerful logic (Rugman, 1981, 1985), it is still deficient in some respect as a general theory of the MNE given it focuses primarily on one mode of hierarchy i.e. the wholly owned subsidiaries. Yet, there a number of other modes which firms can and do adopt to deal with imperfections in international markets including licensing, management contracts, sub-contracting, joint ventures etc. Moreover, firms often employ different modes simultaneously in addressing the needs of a particular foreign market (Contractor, 1985; Davidson and McFetridge, 1985). Hence, the internalisation theory should also encapsulate an economic rationale for the other modes (Hennart, 1985) and specify the conditions under which each would provide efficiency gains over wholly owned subsidiaries and the market’.

Discuss.

Related Discussions:- Modes of Entry and Internalisation

International trade, why is international trade important for south africa

why is international trade important for south africa

Neoclassical and classical trade theory, Q. Neoclassical and Classical tra...

Q. Neoclassical and Classical trade theory makes the case that free trade can bring a country to an optimum and economically efficient use of its resources; and therefore is an op

Fixed versus floating exchange rates, 1 Answer True or False. Brief explain...

1 Answer True or False. Brief explain your answer. No credit without explanation. a Bretton Woods. During the Bretton Woods system countries with large current account surpluses

Comparative advantage in the land-intensive product, Q. Factor-intensity r...

Q. Factor-intensity reversals define a situation in which the production of a product can be land-intensive in one country, and relatively labor intensive in another ( at given re

Capital account liberalization, Q. "Trade liberalization could preced...

Q. "Trade liberalization could precede capital account liberalization." Discuss. Answer: It is probably true. The issue is associated to the theory of second best and

Wto, economic theories to explain free traden..

economic theories to explain free traden..

What are the benefits and costs of a monetary union, The first African Econ...

The first African Economists Congress organized by the African Union concentrated on the creation of a monetary union and the introduction of single currency in Africa. (a) Ref

Why governments sometimes chose to devalue their currencies, Q. What are th...

Q. What are the three main reasons why governments sometimes chose to devalue their currencies? Answer: 1. Permit the government to fight domestic unemployment despite the

Who is liable for discrimination?, een subject to a discrimination complain...

een subject to a discrimination complaint as a result of their recent recruitment campaign- They told the recruitment agency that they were looking for ‘young women with flair'' to

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd