Research Platforms: Perspective
Is Competitive Advantage a Necessary Condition for the Emergence of the Multinational Enterprise?
Article first published online: 7 FEB 2014
Copyright © 2014 Strategic Management Society
Global Strategy Journal
Volume 4, Issue 1, pages 35–48, February 2014
How to Cite
Hashai, N. and Buckley, P. J. (2014), Is Competitive Advantage a Necessary Condition for the Emergence of the Multinational Enterprise?. Global Strategy Journal, 4: 35–48. doi: 10.1111/j.2042-5805.2013.01069.x
- Issue published online: 7 FEB 2014
- Article first published online: 7 FEB 2014
- Asper Center for Entrepreneurship at the Hebrew University
- multinational enterprise;
- competitive advantage;
- eclectic paradigm;
- ownership advantage;
This article challenges the view that competitive advantage is a necessary condition for the emergence of the multinational enterprise. It formally derives the conditions under which multinational enterprises may emerge without possessing a competitive advantage vis-a-vis their rivals. This counterintuitive argument is based on three insights: (1) the ability of a larger number of disadvantaged home country entrepreneurs to enroll workers in the host country more efficiently than a smaller number of advantaged host country entrepreneurs; (2) asymmetric liability of foreignness for home and host country entrepreneurs; and (3) the ability of location and internalization advantages to substitute for ownership advantage.