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Globalisation and development: an international business strategy approach


  • Robert Pearce

    () (Department of Economics, University of Reading)


The paper seeks to reformulate the ‘colourful and fluid’ early debate on the effects of foreign direct investment (FDI) in two ways. Firstly, the wide range of separate specific concerns of the early debate are subsumed within four generic issues, (i) efficiency, (ii) distribution, (iii) sovereignty, (iv) growth and development. Secondly, the analysis is now structured around modes of analysis of multinational enterprises (MNEs), as the agents that carry out FDI. MNEs are seen as using the freedoms of international transfers central to globalisation in order to leverage competitively the differences of national (or other coherently-defined) economic units. Crucially this response to difference is analysed as reflecting three potential MNE strategic motivations, (i) market seeking, (ii) efficiency seeking, (iii) knowledge seeking. The core of the paper investigates how adoption of different motivations by MNEs would affect performance in terms of the different generic issues. The synergies of this mode of analysis with trade policy (the implicit, or often very explicit, move to outward-oriented industrialisation in the era of globalisation) and new growth theory are also discussed.

Suggested Citation

  • Robert Pearce, 2006. "Globalisation and development: an international business strategy approach," Economics & Management Discussion Papers em-dp2006-35, Henley Business School, Reading University.
  • Handle: RePEc:rdg:emxxdp:em-dp2006-35

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    References listed on IDEAS

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    3. repec:hhs:iuiwop:557 is not listed on IDEAS
    4. Christopher J. Ellis & John Fender, 2011. "Information Cascades and Revolutionary Regime Transitions," Economic Journal, Royal Economic Society, vol. 121(553), pages 763-792, June.
    5. Masahiko Aoki, 2013. "Institutions as cognitive media between strategic interactions and individual beliefs," Chapters,in: Comparative Institutional Analysis, chapter 17, pages 298-312 Edward Elgar Publishing.
    6. Matthias Doepke & Fabrizio Zilibotti, 2008. "Occupational Choice and the Spirit of Capitalism," The Quarterly Journal of Economics, Oxford University Press, vol. 123(2), pages 747-793.
    7. Roemer, John E, 1985. "Rationalizing Revolutionary Ideology," Econometrica, Econometric Society, vol. 53(1), pages 85-108, January.
    8. Abram Bergson, 1991. "The USSR before the Fall: How Poor and Why," Journal of Economic Perspectives, American Economic Association, vol. 5(4), pages 29-44, Fall.
    9. Broadberry, Stephen & Klein, Alexander, 2011. "When and why did eastern European economies begin to fail? Lessons from a Czechoslovak/UK productivity comparison, 1921-1991," Explorations in Economic History, Elsevier, vol. 48(1), pages 37-52, January.
    10. Bergson, A., 1991. "The Ussr Before The Fall: How Poor And Why," Harvard Institute of Economic Research Working Papers 1540, Harvard - Institute of Economic Research.
    11. Roemer, John E, 1980. "A General Equilibrium Approach to Marxian Economics," Econometrica, Econometric Society, vol. 48(2), pages 505-530, March.
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    Cited by:

    1. repec:ucm:wpaper:06-08 is not listed on IDEAS
    2. Álvarez, Isabel & Marín, Raquel, 2010. "Entry modes and national systems of innovation," Journal of International Management, Elsevier, vol. 16(4), pages 340-353, December.
    3. Isabel Álvarez & Raquel Marín, 2008. "FDI and world heterogeneities: The role of absorptive capacities," Working Papers del Instituto Complutense de Estudios Internacionales 0806, Universidad Complutense de Madrid, Instituto Complutense de Estudios Internacionales.
    4. Pearce, Robert & Papanastassiou, Marina, 2006. "To 'almost see the world': Hierarchy and strategy in Hymer's view of the multinational," International Business Review, Elsevier, vol. 15(2), pages 151-165, April.
    5. repec:spr:manint:v:49:y:2009:i:1:d:10.1007_s11575-008-0126-5 is not listed on IDEAS
    6. Lévy, Brigitte, 2007. "The interface between globalization, trade and development: Theoretical issues for international business studies," International Business Review, Elsevier, vol. 16(5), pages 594-612, October.

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