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Keywords:

  • collective goods;
  • transaction-cost economics;
  • institutional theory;
  • governance modes;
  • MNE nonmarket strategies

Abstract

The global business environment is increasingly characterized by dynamic collaborations among public as well as private for-profit and not-for-profit actors for the provision in emerging markets of such local public goods as health, education, transportation, and utilities whose supply has received scant attention in international business research. Drawing from, and expanding on, transaction-cost economics and institutional theory, we analyze the choice of collaborative arrangements among the three parties for the local supply of these public goods—here, called a ‘collective goods’ via contracting, alliance, internationalization or assistance—the latter a governance mode hitherto overlooked in transaction-cost economics but essential in dealing with collective goods and nonmarket actors. We discuss the implications of these arrangements for multinational enterprise nonmarket strategies within the realm of global strategy.