Towards a theory of multinational enterprise

Craig S. Galbraith, Neil M Kay

    Research output: Contribution to journalArticle

    Abstract

    This paper sets forth a rationale for multinational enterprise within a transaction cost analytic framework. It is suggested that hedging is an unlikely strategy for multinationals, and that economies gained from the intermediate case of firm-specific/partially product-specific information links provides the rationale for multinational enterprise. Foreign location is necessary to exploit product-specific economies, while the multinational option internalizes and guards the non-product-specific informational content of overseas investment. © 1986.

    Original languageEnglish
    Pages (from-to)3-19
    Number of pages17
    JournalJournal of Economic Behavior and Organization
    Volume7
    Issue number1
    Publication statusPublished - Mar 1986

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