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THE FUTURE OF THE MULTINATIONAL ENTERPRISE
This paper reviews the progress of the research agenda initiated by our book The Future of the Multinational Enterprise (Buckley & Casson, 1976, 2003). It centres on our joint work over the last 30 years, and is in some senses a riposte to Buckley's (2002) question "Is the international business agenda running out of steam?" Its answer is firmly in the negative.
This paper is an attempt to illustrate the efforts of two researchers to progress an agenda that seemed to them to be important. It was, of course, influenced by other researchers (who, we regret, we cannot acknowledge here), but essentially it has retained a unity of purpose and a coherence over time. The pursuance of an independent research agenda has become increasingly difficult since 1976, and readers might want to question just why this should be so.
Buckley and Casson (1976) analysed the multinational enterprise (MNE) within a broad-based intellectual framework based on the pioneering work of Ronald Coase (1937). The book demonstrated how seemingly unrelated aspects of multinational operations, such as technology transfer and international trade in semi-processed products, could be understood using a single concept - the internalisation of imperfect markets.
Our book explained why MNE activity was concentrated mainly in knowledge-intensive industries characterised by high levels of research and development (R&D) expenditure and advertising expenditure, and by the employment of skilled labour. It also explained why residual MNE activity was concentrated mainly in mining and tropical agriculture.
An MNE was defined as a firm that owns and controls activities in two or more different countries. The analysis was based on the principle that the boundaries of a firm are set at the margin where the benefits of further internalisation of markets are just offset by the costs. Another principle was that firms sought out the least-cost location for each activity, taking its linkages with other activities into account. A third principle was that the firm's profitability, and the dynamics of its growth, were based upon a continuous process of innovation stemming from R&D. In this context, innovation was construed broadly, to encompass not only technology but also new products, new business methods, and other commercial applications of new knowledge. The interaction of these three...