Online from: 2003
Subject Area: International Business
Options: To add Favourites and Table of Contents Alerts please take a Emerald profile
Downloads: The fulltext of this document has been downloaded 154 times since 2012
Article citation: Alan M. Rugman, (2012) "Letter from the Editor", Multinational Business Review, Vol. 20 Iss: 2, pp. -
At MBR we are proud to publish four papers in this issue, which advance the core theoretical foundations of the field of international business. The first two papers are entirely theoretical and serve to update internalization theory by respectively applying it to the global supply chain (Casson and Wadeson) and regional strategy (Verbeke and Kano). The third paper applies internalization theory and the FSA/CSA framework to a case study of New Zealand firms, revealing new insights into this framework. The final paper in this theoretical issue examines the theoretical antecedents of the multinationality and performance literature (Matysiak and Bausch).
The brilliant conceptual paper by Mark Casson and Nigel Wadeson applies the systems view of international business theory (developed by Casson some thirty years ago) to analysis of the case of offshore licensing. It is well known that the strategic choice of entry mode literature examines the three modalities of exporting, wholly owned subsidiaries (import substituting FDI) and licensing. The case of offshore licensing has been a neglected fourth modality since it involves licensing (offshore) to an independent partner firm in another country.
Casson’s model is developed for a hierarchical and centralized parent firm with variables for knowledge generation (R&D), marketing, scale economies, and other aspects of cost minimization. Essentially, this literature and type of model has been used recently to explain the global factory and the nature of global supply chains. Within this framework of economic integration and efficiency (in terms of economic marginal cost optimization), Casson develops an intriguing case for offshore licensing as an interesting but neglected area of international business theory. At MBR, we welcome comments on this novel paper, which we hope will expand the conversation in international business.
The paper by Verbeke and Kano is an incisive re-statement of new internalization theory, which examines firm-specific advantages (FSAs) as dynamic capabilities. The paper is framed as a commentary on the paper by Wolf, Egelhoff and Dunemann in the last issue of MBR. Contrary to that paper, which argued that disciplinary perspectives other than transaction cost economics (internalization theory) might explain the regional nature of MNEs, Verbeke and Kano demonstrate that internalization theory fully incorporates these other disciplinary perspectives. Thus, Verbeke and Kano make two major contributions. First, they show that the empirical research demonstrating the regional nature of MNEs can be entirely explained by new internalization theory. Second, they demonstrate, again, that internalization theory is a general theory of the MNE. At MBR, we commend this paper to readers and offer space to those who wish to progress this conversation.
The paper by Gerke and Benson-Rea also uses internalization theory to examine the firm-specific advantages (FSAs) and country-specific advantages (CSAs) of a set of small New Zealand firms in the yachting and outdoor clothing sectors. The paper uses grounded research to examine the expansion paths (the internationalization process) of these firms. This paper demonstrates that internalization theory applies to small and medium-sized enterprises (SMEs) as well as to the larger MNEs which are the normal focus of examination. This point is not new, but has been somewhat neglected in work on SMEs.
Finally, the paper by Matysiak and Bausch examines the literature on multinationality and performance. This is a well-ploughed field, but they bring new insight through an original synthesis of the literature in which they examine the antecedents of MNE performance at multiple levels of analysis: industry level; firm level; and country level. The main focus of the paper is to examine articles in three leading academic journals (JIBS, SMJ and JMS) over the period 1976 to 2010. They fit these 63 articles into the S-curve relationship between multinationality and performance by use of the FSA and CSA concepts, thereby firmly embedding this literature review into internalization theory.
In conclusion, this issue of MBR publishes four papers on internalization theory. Together, they demonstrate the robust nature and wide-ranging scope of new internalization theory, whereby FSAs (in the form of dynamic capabilities) and CSAs can be used as analytical tools to uncover the strategies and structures of both MNEs and SMEs. At MBR we welcome further discussion of these papers.Alan M. Rugman