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Toward an eclectic theory of international production

Toward an eclectic theory of international production from Journal of International Business Studies, Spring/Summer 1980, p. 9. Drawing on the work of several economists including himself, Dr. Dunning identifies three types of factors to account for international production: location-specific endowments, own- ership-specific endowments and internalization advantages. The first group are available to all firms in a given location. They include "not only ... natural resources, most kinds of labor, and proximity to markets, but also the legal and com- mercial environment. ..... The second type of input is that which an enterprise may create itself - certain types of tech- nology and organizational skills." The third category concerns the advantages to a firm of internalizing its ownership-speci- fic endowments rather than selling them, for example through licensing. "The basic incentive of a firm to internalize its ownership endowments is to avoid the disadvantages, or capi- talize on the imperfections, of one or the other of the two main external mechanisms of resource allocation - the market or price system and the public authority fiat." The author notes, "It is this last aspect of the theory that has been most seri- ously neglected," and he has it "very much in mind" in his present study. However, his http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Thunderbird International Business Review Wiley

Toward an eclectic theory of international production

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References (3)

Publisher
Wiley
Copyright
Copyright © 1980 Wiley Subscription Services, Inc., A Wiley Company
ISSN
1096-4762
eISSN
1520-6874
DOI
10.1002/tie.5060220301
Publisher site
See Article on Publisher Site

Abstract

from Journal of International Business Studies, Spring/Summer 1980, p. 9. Drawing on the work of several economists including himself, Dr. Dunning identifies three types of factors to account for international production: location-specific endowments, own- ership-specific endowments and internalization advantages. The first group are available to all firms in a given location. They include "not only ... natural resources, most kinds of labor, and proximity to markets, but also the legal and com- mercial environment. ..... The second type of input is that which an enterprise may create itself - certain types of tech- nology and organizational skills." The third category concerns the advantages to a firm of internalizing its ownership-speci- fic endowments rather than selling them, for example through licensing. "The basic incentive of a firm to internalize its ownership endowments is to avoid the disadvantages, or capi- talize on the imperfections, of one or the other of the two main external mechanisms of resource allocation - the market or price system and the public authority fiat." The author notes, "It is this last aspect of the theory that has been most seri- ously neglected," and he has it "very much in mind" in his present study. However, his

Journal

Thunderbird International Business Review – Wiley

Published: Sep 1, 1980

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