International Entrepreneurship and the Theory of the (Long-Lived) International Firm: A Capabilities Perspective


  • Abdulrahman Al-Aali,

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    • Abdulrahman Al-Aali is a Professor of International Business and Marketing and Director of the PhD in Business Program, College of Business Administration, King Saud University, Riyadh, Saudi Arabia.
  • David J. Teece

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    • David J. Teece is the Tusher Professor in Global Business and the Director of the Institute for Business Innovation, Haas School of Business, UC Berkeley, Berkeley, CA, USA.

  • We wish to thank Peter Buckley, John Cantwell, Jay Connor, Christos Pitelis, Jean-Francois Hennart, Greg Linden, Richard Nelson, Sunyoung Leih, three anonymous reviewers, and the editors of this special issue for helpful discussions that have informed our research on the theory of the MNE and the theory of IE.

Please send correspondence to: David J. Teece, tel.: (510) 285-3300; e-mail: and to Abdulrahman Al-Aali at


This paper expands on the Oviatt–McDougall framework of sustainable international ventures. It does so by relating the elements of the framework to existing scholarship on the multinational enterprise (MNE), a category that encompasses foreign direct-invested new ventures (FDINVs). The paper then incorporates entrepreneurship and capabilities into MNE theory and applies them to the FDINV. Strong dynamic capabilities coupled with good strategy work together to generate and sustain superior enterprise performance in fast-moving global environments. The resulting framework is used to revisit key questions in MNE/FDINV research such as the timing and mode of FDI.