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 language | English |
|---|---|
| Pages (from-to) | 3-19 |
| Number of pages | 17 |
| Journal | Journal of Economic Behavior and Organization |
| Volume | 7 |
| Issue number | 1 |
| Publication status | Published - Mar 1986 |