Quotation Low, Yi Jia, Ho, Yen-Chen (Elsen). Forthcoming. A Knowledge-based Theory of the Multinational Economic Organization. Long Range Planning ,




The study of the MNC has been deeply influenced by transaction-cost economics over the last four decades (Buckley and Casson, 1976; Dunning, 2000; Hennart, 1982; Rugman, 1981). Coase’s (1937) analysis of the boundaries of the firm became the foundation of one of the most important and enduring areas of international business research: the study of internalization and the theory of the multinational corporation. However, recent research has argued that a capability-based approach to the MNC provides a more complete analysis than traditional internalization theory (Cantwell, 2014; Teece, 2014). In this paper, we argue that efforts to subsume the analysis of internalization within the study of capabilities exhibit a fundamental flaw. They neglect a critical distinction Williamson (1999) made between economic organization and the firm. Drawing on concepts from the knowledge-based view of the firm, we develop a more comprehensive approach to multinational economic organization that deals with questions of both scope and form of organization.


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Publication's profile

Affiliation WU
Type of publication Journal article
Journal Long Range Planning
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, INF-A, MAN-A, STRAT-B, WH-B
Language English
Title A Knowledge-based Theory of the Multinational Economic Organization
Year 2016
Reviewed? Y
DOI http://dx.doi.org/10.1016/j.lrp.2015.12.004


Low, Yi Jia (Former researcher)
Ho, Yen-Chen (Elsen) (University of Reading, United Kingdom)
Institute for Business Policy and Planning IN (Former organization)
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