{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

MNC's October 23 Week

MNC's October 23 Week - MNCs o Transaction costs o Tacit...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Definitions: Home economy: where the MNC starts Host economy: where it goes to invest Greenfield: build a new factory/ firm M&A: buy someone else’s factory Portfolio investment: equities, bonds, but no control FDI: gives you control Joint venture, shared ownership, control Strategic alliance: shared facility Horizontal network: same kind of production in different countries Vertical Network: component production and final assembly in different countries Why do MNC’s exist? No: cost of being foreign competitive failure o Export, license, partner, live in local market No, but politics MNC’s o Import barriers, exchange controls etc. Yes, various forms of market failure
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: MNCs o Transaction costs o Tacit knowledge o Asset specificity o Oligopolistic rent seeking • Yes, “sociological” or individual factors: managers want firms to expand—they get more perks and power (influence) “OLI” Model for FDI 1. Ownership specific advantages of TNC control 2. Location specific advantages of Host 3. Advantages of Internalization a. IF: only #1 then licensing, exportsm etc. . 4 Types of of MNC’s • Internationalization (mostly raw materials – shallow, mostly horizontal GCC) • Multinationalization (local market manufacturing—shallow, horizontal, no GCC) • Transnationalization (glocal manufacturing vertical GCC’s) •...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online