The International Firm: A Vehicle for Overcoming Barriers to Trade and a Global Intelligence Organization Diffusing the Notion of a Nation
The multinational firm (MNF) is introduced as the intersection between trade theory and the theory of the firm. I show that economies of scale associated with various knowledge inputs have made it possible for firms to grow large through internationalization and, once large, staying competitive and large. Internationalization is a technique of both overcoming barriers to trade, and of efficient learning to stay competitive. International firms are increasingly becoming large and highly mobile carriers of industrial knowledge embodied in teams of humans. With barriers to trade and factor movements further reduced in Europe the first reason for globalization will decrease for firms located inside the internal market, but intensified technological competition will make the second factor increasingly important, constantly shifting the intelligence locus of the business organization to the markets where the most advanced industrial knowledge is being exhibited in competition. Europe will become such a locus of competition and competence allocation to the extent "it" lives up to its ambition to deregulate markets, and especially the markets for ownership and control. In general global markets are seen as a vast source of business opportunities and the firm as a local source of competence to exploit the opportunities.
|Date of creation:||Dec 1988|
|Date of revision:|
|Contact details of provider:|| Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden|
Phone: +46 8 665 4500
Fax: +46 8 665 4599
Web page: http://www.ifn.se/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dunning, John H, 1973. "The Determinants of International Production," Oxford Economic Papers, Oxford University Press, vol. 25(3), pages 289-336, November.
- Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
- Jonathan Eaton & Gene M. Grossman, 1986.
"Optimal Trade and Industrial Policy Under Oligopoly,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 101(2), pages 383-406.
- Jonathan Eaton & Gene M. Grossman, 1983. "Optimal Trade and Industrial Policy Under Oligopoly," NBER Working Papers 1236, National Bureau of Economic Research, Inc.
- Dixit, Avinash K. & Grossman, Gene M., 1986.
"Targeted export promotion with several oligopolistic industries,"
Journal of International Economics,
Elsevier, vol. 21(3-4), pages 233-249, November.
- Avinash K. Dixit & Gene M. Grossman, 1984. "Targeted Export Promotion with Several Oligopolistic Industries," NBER Working Papers 1344, National Bureau of Economic Research, Inc.
- Young, Allyn A., 1928. "Increasing Returns and Economic Progress," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 38, pages 527-542.
- Sherwin Rosen, 1972. "Learning by Experience as Joint Production," The Quarterly Journal of Economics, Oxford University Press, vol. 86(3), pages 366-382.
- Baumol, William J, 1982. "Contestable Markets: An Uprising in the Theory of Industry Structure," American Economic Review, American Economic Association, vol. 72(1), pages 1-15, March.
- Helpman, Elhanan, 1981. "International trade in the presence of product differentiation, economies of scale and monopolistic competition : A Chamberlin-Heckscher-Ohlin approach," Journal of International Economics, Elsevier, vol. 11(3), pages 305-340, August.
- Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
- Paul M Romer, 1999.
"Increasing Returns and Long-Run Growth,"
Levine's Working Paper Archive
2232, David K. Levine.
- Caves, Richard E., 1985. "International trade and industrial organization: Problems, solved and unsolved," European Economic Review, Elsevier, vol. 28(3), pages 377-395, August.
- Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
- Shoven, John B & Whalley, John, 1984. "Applied General-Equilibrium Models of Taxation and International Trade: An Introduction and Survey," Journal of Economic Literature, American Economic Association, vol. 22(3), pages 1007-51, September.
- Findlay, Ronald & Kierzkowski, Henryk, 1983. "International Trade and Human Capital: A Simple General Equilibrium Model," Journal of Political Economy, University of Chicago Press, vol. 91(6), pages 957-78, December.
- Teece, David J., 1986. "Transactions cost economics and the multinational enterprise An Assessment," Journal of Economic Behavior & Organization, Elsevier, vol. 7(1), pages 21-45, March.
- Eliasson, Gunnar, 1986. "International Competition, Productivity Change and the Organisation of Production," Working Paper Series 154, Research Institute of Industrial Economics.
When requesting a correction, please mention this item's handle: RePEc:hhs:iuiwop:0201. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Elisabeth Gustafsson)
If references are entirely missing, you can add them using this form.