|
|
| Line 1: |
Line 1: |
| {{For|the term in computing|Internationalization and localization}}
| | Name: Cheri Arellano<br>Age: 28<br>Country: Canada<br>Town: Edmonton <br>ZIP: T5j 2r4<br>Street: 3865 184th Street<br><br>my web-site ... [http://hemorrhoidtreatmentfix.com/prolapsed-hemorrhoid-treatment prolapsed hemorrhoids treatment] |
| | |
| In economics, '''internationalization''' has been viewed as a process of increasing involvement of enterprises in international markets,<ref name="susman01">{{cite book |others= Welch & Luostarinen, 1988 |title= Small and Medium-sized Enterprises and the Global Economy |last= Susman |first= Gerald I. |authorlink= |coauthors= |year= 2007 |publisher= [[Edward Elgar Publishing]] |location= |isbn= 1-84542-595-2 |page= 281 |url= http://books.google.com/?id=6TUuXQifwxoC&printsec=frontcover#PPA281,M1 }}</ref> although there is no agreed definition of internationalization<ref name="susman02">{{cite book |others= Bell & Young, 1998 |title= Small and Medium-sized Enterprises and the Global Economy |last= Susman |first= Gerald I. |authorlink= |coauthors= |year= 2007 |publisher= Edward Elgar Publishing |location= |isbn= 1-84542-595-2 |page= 281 |url= http://books.google.com/?id=6TUuXQifwxoC&printsec=frontcover#PPA281,M1 }}</ref> or international entrepreneurship.<ref name="susman03">{{cite book |others= Young et al., 2003 |title= Small and Medium-sized Enterprises and the Global Economy |last= Susman |first= Gerald I. |authorlink= |coauthors= |year= 2007 |publisher= Edward Elgar Publishing |location= |isbn= 1-84542-595-2 |page= 281 |url= http://books.google.com/?id=6TUuXQifwxoC&printsec=frontcover#PPA281,M1 }}</ref> There are several internationalization theories which try to explain why there are international activities.
| |
| | |
| ==Entrepreneurs/Enterprises==
| |
| Those entrepreneurs who are interested in the field of internationalization of business need to possess the ability to think globally and have an understanding of international cultures. By appreciating and understanding different beliefs, values, behaviors and business strategies of a variety of companies within other countries, entrepreneurs will be able to internationalize successfully. Entrepreneurs must also have an ongoing concern for innovation, maintaining a high level of quality, be committed to [[corporate social responsibility]], and continue to strive to provide the best business strategies and either goods or services possible while adapting to different countries and cultures.
| |
| | |
| == Trade theories ==
| |
| | |
| === Absolute cost advantage <small>''([[Adam Smith]], 1776)''</small> ===
| |
| {{main|Absolute advantage}}
| |
| Adam Smith claimed that a country should specialise in, and export, commodities in which it had an absolute advantage.<ref name="ingham">{{cite book |title= International economics: a European focus |last= Ingham |first= Barbara |authorlink= |coauthors= |year= 2004 |publisher= Pearson Education |location= |isbn= 0-273-65507-8 |pages= 336 |url= http://books.google.com/?id=zIaS9R7HUGIC&printsec=frontcover#PPT37,M1 }}</ref> An absolute advantage existed when the country could produce a commodity with less costs per unit produced than could its trading partner.<ref name="ingham" /> By the same reasoning, it should import commodities in which it had an absolute disadvantage.<ref name="ingham" />
| |
| | |
| While there are possible [[gains from trade]] with absolute advantage, comparative advantage extends the range of possible mutually beneficial exchanges. In other words it is not necessary to have an absolute advantage to gain from trade, only a comparative advantage.
| |
| | |
| === Comparative cost advantage <small>''([[David Ricardo]], 1817)''</small> ===
| |
| {{main|Comparative advantage|Ricardian economics}}
| |
| David Ricardo argued that a country does not need to have an absolute advantage in the production of any commodity for international trade between it and another country to be mutually beneficial.<ref name="hunt">{{cite book |title= History of economic thought: A critical perspective |last= Hunt |first= E. K. |authorlink= |coauthors= |year= 2002 |publisher= M.E. Sharpe |location= |isbn= 0-7656-0607-0 |page= 120 |url= http://books.google.com/?id=_qHKFNwhahoC&printsec=frontcover#PPA120,M1}}</ref> Absolute advantage meant greater efficiency in production, or the use of less labor factor in production.<ref name="hunt" /> Two countries could both benefit from trade if each had a relative advantage in production.<ref name="hunt" /> Relative advantage simply meant that the ratio of the labor embodied in the two commodities differed between two countries, such that each country would have at least one commoditiy where the relative amount of labor embodied would be less than that of the other country.<ref name="hunt" />
| |
| | |
| === Gravity model of trade <small>''([[Walter Isard]], 1954)''</small> ===
| |
| {{main|Gravity model of trade}}
| |
| The gravity model of trade in [[international economics]], similar to other [[gravity model]]s in [[social science]], predicts bilateral trade flows based on the economic sizes of (often using [[GDP]] measurements) and distance between two units. The basic theoretical model for trade between two countries takes the form of:
| |
| | |
| :<math>F_{ij} = G \frac{M_i M_j}{D_{ij}}</math> | |
| | |
| with:
| |
| | |
| :<math>F \,</math>: '''Trade flow'''
| |
| | |
| :<math>i, j \,</math>: '''Country i and j'''
| |
| | |
| :<math>M \,</math>: '''Economic mass''', for example GDP | |
| | |
| :<math>D \,</math>: '''Distance'''
| |
| | |
| :<math>G \,</math>: '''Constant'''
| |
| | |
| The model has also been used in [[international relations]] to evaluate the impact of treaties and alliances on trade, and it has been used to test the effectiveness of trade agreements and organizations such as the [[North American Free Trade Agreement]] (NAFTA) and the [[World Trade Organization]] (WTO).
| |
| | |
| === Heckscher-Ohlin model <small>''([[Eli Heckscher]], 1966 & [[Bertil Ohlin]], 1952)''</small> ===
| |
| {{main|Heckscher-Ohlin model}}
| |
| The Heckscher-Ohlin model (H-O model), also known as the ''factors proportions development'', is a [[general equilibrium]] mathematical model of [[International economics|international trade]], developed by [[Eli Heckscher]] and [[Bertil Ohlin]] at the [[Stockholm School of Economics]]. It builds on [[David Ricardo|David Ricardo's]] theory of [[comparative advantage]] by predicting patterns of commerce and production based on the [[Factors of production|factor]] endowments of a trading region. The model essentially says that countries will export products that utilize their abundant and cheap factor(s) of production and import products that utilize the countries' scarce factor(s).<ref name="blaug">{{cite book |title= The methodology of economics, or, How economists explain |last= Blaug |first= Mark |authorlink= |coauthors= |year= 1992 |publisher= Cambridge University Press |location= |isbn= 0-521-43678-8 |page= 190 |url= http://books.google.com/?id=T4y7HyduGnIC&printsec=frontcover#PPA190,M1}}</ref>
| |
| | |
| The results of this work has been the formulation of certain named conclusions arising from the assumptions inherent in the model. These are known as:
| |
| | |
| * [[Heckscher-Ohlin theorem]]
| |
| * [[Rybczynski theorem]]
| |
| * [[Stolper-Samuelson theorem]]
| |
| * [[Factor price equalization|Factor-Price Equalization theorem]]
| |
| | |
| === Leontief paradox <small>''([[Wassily Leontief]], 1954)''</small> ===
| |
| {{main|Leontief paradox}}
| |
| Leontief's paradox in [[economics]] is that the country with the world's highest [[Capital (economics)|capital]]-per worker has a ''lower'' [[Capital intensive|capital:labour ratio]] in [[exports]] than in imports.
| |
| | |
| This [[econometric]] find was the result of Professor [[Wassily W. Leontief]]'s attempt to test the [[Heckscher-Ohlin theorem|Heckscher-Ohlin theory]] empirically. In 1954, Leontief found that the [[United States|U.S.]] (the most [[Factor endowment|capital-abundant]] country in the world by any criteria) exported [[Labour (economics)|labor]]-intensive commodities and imported capital-intensive commodities, in contradiction with Heckscher-Ohlin theory.
| |
| | |
| === Linder hypothesis <small>''([[Staffan Burenstam Linder]], 1961)''</small> ===
| |
| {{main|Linder hypothesis}}
| |
| The Linder hypothesis (demand-structure hypothesis) is a [[conjecture]] in economics about [[international trade]] patterns. The hypothesis is that the more similar are the demand structures of countries the more they will trade with one another. Further, international trade will still occur between two countries having identical [[preferences]] and [[factor endowment]]s (relying on [[Specialization (functional)|specialization]] to create a [[comparative advantage]] in the production of [[Product differentiation|differentiated]] goods between the two nations).
| |
| | |
| === Location theory ===
| |
| {{main|Location theory}}
| |
| Location theory is concerned with the geographic location of economic activity; it has become an integral part of [[economic geography]], [[regional science]], and spatial economics. Location theory addresses the questions of what economic activities are located where and why. Location theory rests — like [[microeconomics|microeconomic theory]] generally — on the assumption that agents act in their own self-interest. Thus firms choose locations that maximize their profits and individuals choose locations, that maximize their utility.
| |
| | |
| === Market imperfection theory <small>''([[Stephen Hymer]], 1976 & [[Charles P. Kindleberger]], 1969 & [[Richard E. Caves]], 1971)''</small> ===
| |
| {{main|Market failure}}
| |
| In economics, a market failure is a situation wherein the allocation of [[Production, costs, and pricing|production]] or use of [[goods and services]] by the [[free market]] is not [[Efficiency (economics)|efficient]]. Market failures can be viewed as scenarios where individuals' pursuit of pure self-interest leads to results that can be improved upon from the societal point-of-view.<ref name="krugman">Krugman, Paul, Wells, Robin, ''Economics'', Worth Publishers, New York, (2006)</ref> The first known use of the term by economists was in 1958,<ref name="Bator">{{cite journal |last= Bator |first= Francis M. |title= The Anatomy of Market Failure |journal= The Quarterly Journal of Economics |volume= 72 |date=August 1958 |pages= 351–379 |doi= 10.2307/1882231 |jstor= 1882231 |issue= 3 |publisher= The MIT Press}}</ref> but the concept has been traced back to the Victorian philosopher [[Henry Sidgwick]].<ref name="Medema">{{cite web |url= http://www.utilitarian.net/sidgwick/about/2004070102.pdf |title= Mill, Sidgwick, and the Evolution of the Theory of Market Failure |accessdate= 2007-06-23 |last= Medema |first= Steven G. |authorlink= |coauthors= |date= |year= 2004 |month= July }}</ref>
| |
| | |
| Market imperfection can be defined as anything that interferes with trade.<ref name="degennaro">{{cite web |url= http://www.frbatlanta.org/filelegacydocs/wp0512.pdf |title= Market Imperfections |accessdate= 2009-03-17 |last= DeGennaro |first= Ramon P. |coauthors= |date= December 2005 |work= Working Paper |publisher= Federal Reserve Bank of Atlanta - Working Paper Series}}</ref> This includes two dimensions of imperfections.<ref name="degennaro" /> First, imperfections cause a rational market participant to deviate from holding the market portfolio.<ref name="degennaro" /> Second, imperfections cause a rational market participant to deviate from his preferred risk level.<ref name="degennaro" /> Market imperfections generate costs which interfere with trades that rational individuals make (or would make in the absence of the imperfection).<ref name="degennaro" />
| |
| | |
| The idea that [[multinational corporation]]s (MNEs) owe their existence to market imperfections was first put forward by [[Stephen Hymer]], [[Charles P. Kindleberger]] and Caves.<ref name="pitelis1">{{cite book |others= [[Stephen Hymer|Hymer]] (1960, published in 1976), [[Charles P. Kindleberger|Kindleberger]] (1969) & Caves (1971) |title= The nature of the transnational firm |last= Pitelis |first= Christos |authorlink= |coauthors= Roger Sugden |year= 2000 |publisher= Routledge |location= |isbn= 0-415-16787-6 |page= 74 |url= http://books.google.com/?id=mXjeiQYR088C&printsec=frontcover#PPA74,M1}}</ref> The market imperfections they had in mind were, however, ''structural'' imperfections in markets for final products.<ref name="pitelis" />
| |
| | |
| According to Hymer, market imperfections are structural, arising from structural deviations from perfect competition in the final product market due to exclusive and permanent control of proprietary technology, privileged access to inputs, scale economies, control of distribution systems, and product differentiation,<ref name="pitelis4">{{cite book |others= [[Joe S. Bain|Bain]] (1956) |title= The nature of the transnational firm |last= Pitelis |first= Christos |authorlink= |coauthors= Roger Sugden |year= 2000 |publisher= Routledge |location= |isbn= 0-415-16787-6 |page= 74 |url= http://books.google.com/?id=mXjeiQYR088C&printsec=frontcover#PPA74,M1}}</ref> but in their absence markets are perfectly efficient.<ref name="pitelis">{{cite book |title= The nature of the transnational firm |last= Pitelis |first= Christos |authorlink= |coauthors= Roger Sugden |year= 2000 |publisher= Routledge |location= |isbn= 0-415-16787-6 |pages= 224 |url= http://books.google.com/?id=mXjeiQYR088C&printsec=frontcover#PPA73,M1}}</ref>
| |
| | |
| By contrast, the insight of transaction costs theories of the MNEs, simultaneously and independently developed in the 1970s by McManus (1972), Buckley and Casson (1976), Brown (1976) and Hennart (1977, 1982), is that ''market imperfections'' are inherent attributes of markets, and MNEs are institutions to bypass these imperfections.<ref name="pitelis" /> Markets experience natural imperfections, i.e. imperfections that are because the implicit neoclassical assumptions of perfect knowledge and perfect enforcement are not realized.<ref name="pitelis5">{{cite book |others= [[John Harry Dunning|Dunning]] & Rugman (1985), Teece (1981) |title= The nature of the transnational firm |last= Pitelis |first= Christos |authorlink= |coauthors= Roger Sugden |year= 2000 |publisher= Routledge |location= |isbn= 0-415-16787-6 |page= 74 |url= http://books.google.com/?id=mXjeiQYR088C&printsec=frontcover#PPA74,M1}}</ref>
| |
| | |
| === New Trade Theory ===
| |
| {{main|New Trade Theory}}
| |
| New Trade Theory (NTT) is the economic critique of international free trade from the perspective of increasing [[returns to scale]] and the [[network effect]]. Some economists have asked whether it might be effective for a nation to shelter infant industries until they had grown to a sufficient size large enough to compete internationally.
| |
| | |
| New Trade theorists challenge the assumption of diminishing returns to scale, and some argue that using protectionist measures to build up a huge industrial base in certain industries will then allow those sectors to dominate the world market (via a network effect).
| |
| | |
| === Specific factors model ===
| |
| {{main|International trade#Specific factors model}}
| |
| In this model, labour mobility between industries is possible while capital is immobile between industries in the short-run. Thus, this model can be interpreted as a 'short run' version of the [[Heckscher-Ohlin model]].
| |
| | |
| == Traditional approaches ==
| |
| | |
| [[File:The Porter Diamond.svg|thumb|400px|The Porter diamond<ref name="traill01">{{cite book |others= [[Michael Porter|Porter]] (1990, p. 127) |title= Competitiveness in the Food Industry |last= Traill |first= Bruce |authorlink= |coauthors= Eamonn Pitts |year= 1998 |publisher= Springer |location= |isbn= 0-7514-0431-4 |page= 19 |url= http://books.google.com/?id=-g_iw4ocyAgC&printsec=frontcover#PPA19,M1 }}</ref>]]
| |
| | |
| === Diamond model <small>''([[Michael Porter]])''</small> ===
| |
| {{main|Diamond model}}
| |
| The diamond model is an economical model developed by [[Michael Porter]] in his book ''The Competitive Advantage of Nations'', where he published his theory of why particular industries become competitive in particular locations.<ref name="traill">{{cite book |others= |title= Competitiveness in the Food Industry |last= Traill |first= Bruce |authorlink= |coauthors= Eamonn Pitts |year= 1998 |publisher= Springer |location= |isbn= 0-7514-0431-4 |pages= 301 |url= http://books.google.com/?id=-g_iw4ocyAgC&printsec=frontcover#PPA17,M1 }}</ref>
| |
| | |
| The diamond model consists of six factors:<ref name="traill" />
| |
| | |
| * Factor conditions
| |
| * Demand conditions
| |
| * Related and supporting industries
| |
| * Firm strategy, structure and rivalry
| |
| * Government
| |
| * Chance
| |
| | |
| The Porter thesis is that these factors interact with each other to create conditions where innovation and improved competitiveness occurs.<ref name="traill" />
| |
| | |
| === Diffusion of innovations <small>''(Rogers, 1962)''</small> ===
| |
| {{main|Diffusion of innovations}}
| |
| Diffusion of innovation is a theory of how, why, and at what rate new ideas and [[technology]] spread through cultures. [[Everett Rogers]] introduced it in his 1962 book, ''Diffusion of Innovations'', writing that "Diffusion is the process by which an innovation is communicated through certain channels over time among the members of a social system."<ref>Rogers, Everett M. (2003).''Diffusion of Innovations'', 5th ed.. New York, NY: Free Press.</ref>
| |
| | |
| === Eclectic paradigm <small>''([[John H. Dunning]])''</small> ===
| |
| {{main|Eclectic paradigm}}
| |
| The eclectic paradigm is a theory in economics and is also known as the OLI-Model.<ref name="hagen">{{cite book |title= Deutsche Direktinvestitionen in Grossbritannien, 1871-1918 |last= Hagen |first= Antje |coauthors= |year= 1997 |publisher= Franz Steiner Verlag |location= Jena |isbn= 3-515-07152-0 |page= 32 |url= http://books.google.com/?id=BqjhLmKdj0AC&printsec=frontcover |format= Dissertation |language= German }}</ref><ref name="twomey">{{cite book |title= A Century of Foreign Investment in the Third World |last= Twomey|first= Michael J. |coauthors= |year= 2000 |publisher= Routledge |location= |isbn= 0-415-23360-7 |page= 8 |url= http://books.google.com/?id=2uZFPyqHMGcC&printsec=frontcover#PPA8,M1 |format= Book}}</ref> It is a further development of the theory of internalization and published by [[John H. Dunning]] in 1980.<ref name="falkenhahn">{{cite web |url= http://www.uni-weimar.de/medien/management/sites/ws0102/int_man/int_man_content/eklektisches_paradigma_falkenhahn_stanslowski.pdf |title= Das Eklektische Paradigma des John Dunning |accessdate= 2009-02-19 |last= Falkenhahn |first= Alexander |coauthors= Roman Stanslowski |date= 2001-11-27 |work= Seminar paper |language= German}}</ref> The theory of internalization itself is based on the [[Transaction cost|transaction cost theory]].<ref name="falkenhahn" /> This theory says that transactions are made within an institution if the transaction costs on the free market are higher than the internal costs. This process is called ''internalization''.<ref name="falkenhahn" />
| |
| | |
| For Dunning, not only the structure of organization is important.<ref name="falkenhahn" /> He added three additional factors to the theory:<ref name="falkenhahn" />
| |
| | |
| * Ownership advantages<ref name="hagen" /> (trademark, production technique, entrepreneurial skills, returns to scale)<ref name="twomey" />
| |
| * Locational advantages (existence of raw materials, low wages, special taxes or tariffs)<ref name="twomey" />
| |
| * Internalisation advantages (advantages by producing through a partnership arrangement such as licensing or a joint venture)<ref name="twomey" />
| |
| | |
| === Foreign direct investment theory ===
| |
| {{main|Foreign direct investment}}
| |
| Foreign direct investment (FDI) in its classic form is defined as a company from one country making a physical investment into building a factory in another country. It is the establishment of an enterprise by a foreigner.<ref name="sullivan01">{{cite book |last = Sullivan |first = Arthur |authorlink = |coauthors = Steven M. Sheffrin |title = Economics: Principles in action |publisher = Pearson Prentice Hall |year = 2003 |location = Upper Saddle River, New Jersey 07458 |pages = 551 |url = http://www.pearsonschool.com/index.cfm?locator=PSZ16o&prog_id=5657&PMDbSiteId=2781&PMDbSolutionId=6724&PMDbSubSolutionId=&PMDbCategoryId=815&PMDbProgramId=5657&PMDbProductId=5475&progtitle=&level=5 |isbn = 0-13-063085-3}}</ref> Its definition can be extended to include investments made to acquire lasting interest in enterprises operating outside of the economy of the investor.<ref>''Foreign Direct Investment'', United Nations Conference on Trade and Development, www.unctad.org</ref> The FDI relationship consists of a parent enterprise and a foreign affiliate which together form a [[multinational corporation]] (MNC). In order to qualify as FDI the investment must afford the parent enterprise ''control'' over its foreign affiliate. The [[International Monetary Fund]] (IMF) defines control in this case as owning 10% or more of the ordinary shares or voting power of an [[Incorporation (business)|incorporated]] firm or its equivalent for an unincorporated firm; lower ownership shares are known as [[portfolio investment]].<ref>[[International Monetary Fund]], 1993. Balance of Payments Manual, fifth edition (Washington, D.C.)</ref>
| |
| | |
| === Monopolistic advantage theory <small>''([[Stephen Hymer]])''</small> ===
| |
| {{main|Monopolistic advantage theory}}
| |
| The monopolistic advantage theory is an approach in international business which explain why firms can compete in foreign settings against indigenous competitors<ref name="bürgel">{{cite book |others= |title= The internationalisation of British start-up companies in high-technology industries |last= Bürgel |first= Oliver |authorlink= |coauthors= |year= 2000 |publisher= Springer (Zentrum für Europäische Wirtschaftsforschung) |location= |isbn= 3-7908-1292-7 |page= 48 |url= http://books.google.com/?id=HRFODHxjNYsC&printsec=frontcover#PPA48,M1 }}</ref> and is frequently associated with the seminal contribution of [[Stephen Hymer]].<ref name="bürgel01">{{cite book |others= [[Stephen Hymer|Hymer]] (1976); Hymer's original thesis was completed in 1960, but it was only after his death, in 1976, that it was published by the [[Massachusetts Institute of Technology|MIT]]. By that time, his ideas had already found widespread acceptance. |title= The internationalisation of British start-up companies in high-technology industries |last= Bürgel |first= Oliver |authorlink= |coauthors= |year= 2000 |publisher= Springer (Zentrum für Europäische Wirtschaftsforschung) |location= |isbn= 3-7908-1292-7 |page= 48 |url= http://books.google.com/?id=HRFODHxjNYsC&printsec=frontcover#PPA48,M1 }}</ref>
| |
| | |
| === Non-availability approach <small>''([[Irving B. Kravis]], 1956)''</small> ===
| |
| {{main|Non-availability approach}}
| |
| The non-availability explains international trade by the fact that each country imports the goods that are not available at home.<ref name="gandolfo01">{{cite book |others= [[Irving B. Kravis]] (1956) |title= International Trade Theory and Policy: With 12 Tables |last= Gandolfo |first= Giancarlo |authorlink= |coauthors= |year= 1998 |publisher= Springer |location= |isbn= 3-540-64316-8 |page= 233 |url= http://books.google.com/?id=IOtnekHjoJgC&printsec=frontcover#PPA233,M1 }}</ref> This unavailability may be due to lack of natural resources (oil, gold, etc.: this is ''absolute'' unavailability) or to the fact that the goods cannot be produced domestically, or could only be produced at prohibitive costs (for technological or other reasons): this is ''relative'' unavailability.<ref name="gandolfo">{{cite book |others= |title= International Trade Theory and Policy: With 12 Tables |last= Gandolfo |first= Giancarlo |authorlink= |coauthors= |year= 1998 |publisher= Springer |location= |isbn= 3-540-64316-8 |pages= 544 |url= http://books.google.com/?id=IOtnekHjoJgC&printsec=frontcover#PPA233,M1 }}</ref> On the other hand, each country exports the goods that are available at home.<ref name="gandolfo" />
| |
| | |
| === Technology gap theory of trade <small>''(Posner)''</small> ===
| |
| {{main|Technology gap}}
| |
| The technology gap theory describes an advantage enjoyed by the country that introduces new goods in a market.<ref name="gandolfo">{{cite book |others= |title= International Trade Theory and Policy: With 12 Tables |last= Gandolfo |first= Giancarlo |authorlink= |coauthors= |year= 1998 |publisher= Springer |location= |isbn= 3-540-64316-8 |page= 234 |url= http://books.google.com/?id=IOtnekHjoJgC&printsec=frontcover#PPA234,M1 }}</ref> As a consequence of research activity and entrepreneurship, new goods are produced and the innovating country enjoys a monopoly until the other countries learn to produce these goods: in the meantime they have to import them.<ref name="gandolfo" /> Thus, international trade is created for the time necessary to imitate the new goods (''imitation lag'').<ref name="gandolfo" />
| |
| | |
| === Uppsala model ===
| |
| {{main|Uppsala model}}
| |
| The Uppsala model<ref name="elgar01">{{cite book |others= Johanson & Wiedersheim-Paul (1975), Johanson & Vahlne (1977) |title= Learning in the Internationalisation Process of Firms |last= Elgar |first= Edward |authorlink= |coauthors= |year= 2003 |publisher= |location= |isbn= 1-84064-662-4 |page= 261 |url= http://books.google.com/?id=e_gkLdF1ocwC&printsec=frontcover#PPA261,M1 |accessdate= 2009-03-21}}</ref> is a theory that explains how firms gradually intensify their activities in foreign markets.<ref>{{cite book|last=Blomstermo|first=Anders|coauthors=Dharma Deo Sharma|title=Learning in the internationalisation process of firms|publisher=Edward Elgar|year=2003|pages=36–53|isbn=978-1-84064-662-7}}</ref> It is similar to the POM model.<ref name="elgar02">{{cite book |others= Luostarinen (1979) |title= Learning in the Internationalisation Process of Firms |last= Elgar |first= Edward |authorlink= |coauthors= |year= 2003 |publisher= |location= |isbn= 1-84064-662-4 |page= 261 |url= http://books.google.com/?id=e_gkLdF1ocwC&printsec=frontcover#PPA261,M1 |accessdate= 2009-03-21}}</ref> The key features of both models are the following: firms first gain experience from the domestic market before they move to foreign markets; firms start their foreign operations from culturally and/or geographically close countries and move gradually to culturally and geographically more distant countries; firms start their foreign operations by using traditional exports and gradually move to using more intensive and demanding operation modes (sales subsidiaries etc.) both at the company and target country level.<ref name="elgar">{{cite book |others= |title= Learning in the Internationalisation Process of Firms |last= Elgar |first= Edward |authorlink= |coauthors= |year= 2003 |publisher= |location= |isbn= 1-84064-662-4 |page= 261 |url= http://books.google.com/?id=e_gkLdF1ocwC&printsec=frontcover#PPA261,M1 |accessdate= 2009-03-21}}</ref>
| |
| | |
| == Further theories ==
| |
| | |
| === Behavioural theory of the firm <small>''(Richard M. Cyert & James G. March, 1963; Yair Aharoni, 1966)''</small> ===
| |
| {{main|Behavioural theory of the firm}}
| |
| | |
| === Contingency theory ===
| |
| {{main|Contingency theory}}
| |
| Contingency theory refers to any of a number of management theories. Several contingency approaches were developed concurrently in the late 1960s. They suggested that previous theories such as [[Max Weber|Weber]]'s [[bureaucracy]] and [[Frederick Winslow Taylor]]'s [[scientific management]] had failed because they neglected that management style and organizational structure were influenced by various aspects of the environment: the contingency factors. There could not be "one best way" for leadership or organization.
| |
| | |
| === Contract theory ===
| |
| {{main|Contract theory}}
| |
| In economics, contract theory studies how economic actors can and do construct contractual arrangements, generally in the presence of [[asymmetric information]]. Contract theory is closely connected to the field of [[law and economics]]. One prominent field of application is managerial compensation.
| |
| | |
| === Economy of scale ===
| |
| {{main|Economy of scale}}
| |
| Economies of scale, in [[microeconomics]], are the cost advantages that a business obtains due to expansion. They are factors that cause a producer’s average cost per unit to fall as output rises.<ref name="sullivan02">{{cite book |last = Sullivan |first = Arthur |authorlink = |coauthors = Steven M. Sheffrin |title = Economics: Principles in action |publisher = Pearson Prentice Hall |year = 2003 |location = Upper Saddle River, New Jersey 07458 |page = 157 |url = http://www.pearsonschool.com/index.cfm?locator=PSZ16o&prog_id=5657&PMDbSiteId=2781&PMDbSolutionId=6724&PMDbSubSolutionId=&PMDbCategoryId=815&PMDbProgramId=5657&PMDbProductId=5475&progtitle=&level=5 |isbn = 0-13-063085-3}}</ref> [[Diseconomies of scale]] are the opposite. Economies of scale may be utilized by any size firm expanding its scale of operation.
| |
| | |
| === Internalisation theory <small>''(Peter J. Buckley & Mark Casson, 1976; Rugman, 1981)''</small> ===
| |
| {{main|Internalisation theory}}
| |
| | |
| === Product life cycle theory <small>''(Raymond Vernon, 1966)''</small> ===
| |
| {{main|Product life cycle management}}
| |
| Product Life Cycle Management is the succession of strategies used by management as a product goes through its [[product life cycle]]. A product's life is the following of different phases : "NEW product", "GROWTH product", "MATURITY product" and "OBSOLESCENCE product" The conditions in which a product is sold changes over time and must be managed as it moves through its succession of stages.
| |
| <ref name="vernon">{{cite book |others= |title= International Investment and International Trade in the Product Cycle. in: Quarterly Journal of Economics. |last= Vernon |first= Raymond |authorlink= |coauthors= |year= 1966 |publisher= Cambridge |location= |isbn= ISSN 0033-5533 |page= 191 |url= http://dispatch.opac.d-nb.de/DB=1.1/CMD?ACT=SRCHA&IKT=8&TRM=0033-5533 |accessdate= }}</ref>
| |
| | |
| === Transaction cost theory ===
| |
| {{main|Theory of the firm|Transaction cost}}
| |
| The theory of the firm consists of a number of [[economic theory|economic theories]] which describe the nature of the firm, company, or corporation, including its existence, its behaviour, and its relationship with the market.
| |
| | |
| [[Ronald Coase]] set out his transaction cost theory of the firm in 1937, making it one of the first ([[neo-classical economics|neo-classical]]) attempts to define the firm theoretically in relation to the market.<ref name="Coase">Coase, Ronald H., "The Nature of the Firm", ''Economica'' 4, pp 386-405, 1937.</ref> Coase sets out to define a firm in a manner which is both realistic and compatible with the idea of substitution at the margin, so instruments of conventional economic analysis apply. He notes that a firm’s interactions with the market may not be under its control (for instance because of sales taxes), but its internal allocation of resources are: “Within a firm, ... market transactions are eliminated and in place of the complicated market structure with exchange transactions is substituted the entrepreneur ... who directs production.” He asks why alternative methods of production (such as the [[Bid and ask|price mechanism]] and [[economic interventionism|economic planning]]), could not either achieve all production, so that either firms use internal prices for all their production, or one big firm runs the entire economy. <!-- [[see john erdman, 2006]] -->
| |
| | |
| === Theory of the growth of the firm <small>''([[Edith Penrose]], 1959)''</small> ===
| |
| {{main|Edith Penrose#The Theory of the Growth of the Firm|Theory of the growth of the firm}}
| |
| While at Johns Hopkins, Penrose participated in a research project on the growth of firms. She came to the conclusion that the existing theory of the firm was inadequate to explain how firms grow. Her insight was to realise that the 'Firm' in theory is not the same thing as 'flesh and blood' organizations that businessmen call firms. This insight eventually led to the publication of her second book, ''The Theory of the Growth of the Firm'' in 1959.
| |
| | |
| == See also ==
| |
| | |
| * [[Division of labour]]
| |
| * [[Globalization]]
| |
| * [[International marketing]]
| |
| * [[International trade]]
| |
| * [[Internationalization and localization]]
| |
| * [[Mercantilism]]
| |
| | |
| == References ==
| |
| {{Reflist}}
| |
| | |
| [[Category:Economic theories]]
| |
| [[Category:International economics]]
| |
| [[Category:International trade]]
| |