Competitive Advantage and the Existence of the MNC: Earlier Research and the Role of Frictions

24 Pages Posted: 24 Oct 2013

See all articles by Christian Geisler Asmussen

Christian Geisler Asmussen

King's College London; Copenhagen Business School

Nicolai J. Foss

Copenhagen Business School - Department of Strategy and Innovation

Date Written: October 23, 2013

Abstract

This paper provides a counterpoint to Buckley and Hashai’s paper “Is competitive advantage a necessary condition for the emergence of the Multinational Enterprise?”. We agree with their conclusion that it is, in fact, not a necessary condition, but argue that the theoretical reasons behind this are different and more diverse than the ones they propose. We suggest that much extant economic theory is in fact consistent with their view that firms may internationalize without owning or achieving competitive advantages, and model various other ways in which imperfections can drive their overall result. We strongly applaud Buckley and Hashai’s attempt to add more rigor to International Business theory and call for future work to extend this debate.

Keywords: Multinational corporation, competitive advantage, formal theory

JEL Classification: D23, F23, F61

Suggested Citation

Asmussen, Christian Geisler and Foss, Nicolai J., Competitive Advantage and the Existence of the MNC: Earlier Research and the Role of Frictions (October 23, 2013). Available at SSRN: https://ssrn.com/abstract=2344180 or http://dx.doi.org/10.2139/ssrn.2344180

Christian Geisler Asmussen

King's College London ( email )

Strand
London, England WC2R 2LS
United Kingdom

Copenhagen Business School ( email )

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

Nicolai J. Foss (Contact Author)

Copenhagen Business School - Department of Strategy and Innovation ( email )

Kilen
Frederiksberg, 2000
Denmark

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