March 1 IR lecture notes

March 1 IR lecture notes - March 1 2011 Lecture Notes A...

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March 1, 2011 Lecture Notes A.)History of Multi-national Enterprises a. Merchant Capitalism: think Dutch East Indian Trading Company, part of colonialism, b. Industrial Capitalism: during industrial revolution, mostly British, Japan becomes involved, c. Managerial Capitalism: era in which American MNE’s joined the world, era of industrial capitalism that gave birth to this, assembly line is an example of this B.) Motivation for FDI/MNEs a. FDI three basic advantages (Dunning 1993) i. Ownership Advantages: ownership of tangible or intangible firm- specific assets provide an MNE with a competitive edge over domestic firms and help it overcome the extra costs of doing business internationally ii. Location advantages: could include input costs, transportation costs, import restraints, foreign government promotional policies, or access to foreign consumers associated with the foreign country, resource and market seeking motivations iii. Internalization advantages: explain why MNEs choose FDI over
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This note was uploaded on 05/08/2011 for the course IR 213 taught by Professor Staff during the Spring '08 term at USC.

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March 1 IR lecture notes - March 1 2011 Lecture Notes A...

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