Competitive Advantage and the Existence of the Multinational Corporation: Earlier Research and the Role of Frictions

Authors

  • Christian Geisler Asmussen,

    Corresponding author
    1. Department of Strategic Management and Globalization, Copenhagen Business School, Frederiksberg, Denmark
    • Correspondence to: Christian Geisler Asmussen, Department of Strategic Management and Globalization, Copenhagen Business School, Kilevej 14, 2nd Floor, 2000 Frederiksberg, Denmark. E-mail: cga.smg@cbs.dk

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  • Nicolai J. Foss

    1. Department of Strategic Management and Globalization, Copenhagen Business School, Frederiksberg, Denmark
    2. Department of Strategy and Management, Norwegian School of Economics and Business Administration, Bergen, Norway
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Abstract

This article provides a counterpoint to Hashai and Buckley's article ‘Is competitive advantage a necessary condition for the emergence of the multinational enterprise?’ We agree with their conclusion that it is, in fact, not a necessary condition, but argue that the theoretical reasons behind this are different and more diverse than the ones they propose. We suggest that much extant economic theory is, in fact, consistent with their view that firms may internationalize without owning or achieving competitive advantages, and we model various other ways in which imperfections can drive their overall result. We strongly applaud Hashai and Buckley's attempt to add more rigor to international business theory and call for future work to extend this debate.

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