Internalization theory: an unfinished agenda

Mark Casson, Lynda Porter, Nigel Wadeson

Research output: Contribution to journalArticlepeer-review

10 Citations (SciVal)

Abstract

Internalization theory is usually applied at the firm level to analyse FDI, licensing and subcontracting. This paper extends it to the industry level. It synthesises internalization theory and oligopoly theory. It analyses a global industry where firms innovate competitively, and freely enter and exit the industry. It presents a formal model which highlights the inter-dependencies between rival firms. Each firm responds to its rivals by jointly optimising production and innovation through inter-dependent ownership and location decisions. The competitive outcome determines which firms serve which markets, which firms enter or exit the industry, and the internalization strategy of each firm.
Original languageEnglish
Pages (from-to)1223-1234
Number of pages12
JournalInternational Business Review
Volume25
Issue number6
Early online date8 Apr 2016
DOIs
Publication statusPublished - 1 Dec 2016

Keywords

  • Internalization;
  • Industry
  • Competition
  • Price
  • Innovation
  • Owndership

Fingerprint

Dive into the research topics of 'Internalization theory: an unfinished agenda'. Together they form a unique fingerprint.

Cite this