A multinational company (MNC) is a corporate organization that owns and controls the production of goods or services in at least one country other than its home country. Control is considered an important aspect of an MNC, to distinguish it from international portfolio investment organizations, such as some international mutual funds that invest in corporations abroad simply to diversify financial risks. Black's Law Dictionary suggests that a company or group should be considered a multinational corporation if it derives 25% or more of its revenue from out-of-home-country operations. A multinational corporation can also be referred to as a multinational enterprise (MNE), a transnational enterprise (TNE), a transnational corporation (TNC), an international corporation, or a stateless corporation. There are subtle but real differences between these terms.
In economics, internationalization or internationalisation is the process of increasing involvement of enterprises in international markets, although there is no agreed definition of internationalization. Internationalization is a crucial strategy not only for companies that seek horizontal integration globally but also for countries that addresses the sustainability of its development in different manufacturing as well as service sectors especially in higher education which is a very important context that needs internationalization to bridge the gap between different cultures and countries. There are several internationalization theories which try to explain why there are international activities.
An export in international trade is a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. The seller of such goods or the service provider is an exporter; the foreign buyer is an importer. Services that figure in international trade include financial, accounting and other professional services, tourism, education as well as intellectual property rights.
A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. It is thus distinguished from a foreign portfolio investment by a notion of direct control.
The Heckscher–Ohlin model is a general equilibrium mathematical model of international trade, developed by Eli Heckscher and Bertil Ohlin at the Stockholm School of Economics. It builds on David Ricardo's theory of comparative advantage by predicting patterns of commerce and production based on the factor endowments of a trading region. The model essentially says that countries export the products which use their abundant and cheap factors of production, and import the products which use the countries' scarce factors.
International business refers to the trade of goods, services, technology, capital and/or knowledge across national borders and at a global or transnational scale.
Stephen Herbert Hymer was a Canadian economist. His research focused on the activities of multinational firms, which was the subject of his PhD dissertation The International Operations of National Firms: A Study of Direct Foreign Investment, presented in 1960, but published posthumously in 1976, by the Department of Economics from Massachusetts Institute of Technology. Charles P. Kindleberger, his thesis supervisor, submitted it for publication, as mentioned by him on the introduction of Hymer's thesis dissertation.
In international economics, international factor movements are movements of labor, capital, and other factors of production between countries. International factor movements occur in three ways: immigration/emigration, capital transfers through international borrowing and lending, and foreign direct investment. International factor movements also raise political and social issues not present in trade in goods and services. Nations frequently restrict immigration, capital flows, and foreign direct investment.
Mark Casson is a British economist and academic. He is a professor of economics at the University of Reading in England. He was Head of Department (1987–94) and is the institution's current Director of the Centre for Institutional Performance.
Maurice Kugler is a Colombian American economist born in 1967. He received his Ph.D. in Economics from UC Berkeley in 2000, as well as an M.Sc.(Econ) and a B.Sc. (Econ) both from the London School of Economics. Dr. Kugler is Professor of Public Policy at George Mason University in the Schar School of Policy and Government. Prior, he worked as a consultant for the World Bank, where he was senior economist before (2010-2012). Most recently he was Principal Research Scientist and Managing Director at IMPAQ International. Before that, he was head of the Development Research and Data Unit of UNDP, where he was the lead writer of the Human Development Report. He was named in 2007 to the inaugural CIGI Chair in International Public Policy by the Laurier School of Business and Economics. In 2010, CIGI, the Centre for International Governance Innovation, jointly with University of Waterloo and Wilfrid Laurier University launched the Balsillie School of International Affairs. Starting in 2007, Dr. Kugler was Visiting Professor of Public Policy at the Harvard Kennedy School. The economics bibliographic database IDEAS/RePEc has ranked Dr. Kugler among the top 5 percent of economists worldwide by a number of criteria, including average rank score, the number of citations, the h-index, and the breadth of citations across fields. Also, he has more than 7,500 citations in Google Scholar, with over 20 contributions garnering over 100 citations, reflected in an h-index of 37 and an i10-index of 60.
John Harry Dunning was a British economist and is widely recognised as the father of the field of international business. He researched the economics of international direct investment and the multinational enterprise from the 1950s until his death. In the 1980s, he published the eclectic paradigm or OLI-Model/Framework as further development on Internalization theory. OLI remains the predominant theoretical perspective to study international business activities, notably foreign direct investment and multinational enterprises. His first book, American Investment in British Manufacturing Industry (1958), is the first seminal work in the international business field.
Sanjaya Lall was a development economist and Professor of Economics at the University of Oxford. Lall's research interests included the impact of foreign direct investment in developing countries, the economics of multi-national corporations, and the development of technological capability and industrial competitiveness in developing countries. One of the world's pre-eminent development economists, Lall was also one of the founding editors of the journal Oxford Development Studies and a senior economist at the World Bank.
Foreign market entry modes are the ways in which a company can expand its services into a non-domestic market.
Rajneesh Narula, is an economist and academic. He is Professor of International Business Regulation and Director of the John H. Dunning Center for International Business at Henley Business School, University of Reading in Reading, UK.
Alan M. Rugman (1945-2014) was a leading scholar in the field of international business. In his last academic role, he served as Head of International Business and Strategy at Henley Business School, University of Reading in Reading, UK.
Internalization theory is a branch of economics that is used to analyse international business behaviour.
The Reading School of International Business is widely understood in the field of international business (IB), management and economics to embody a stream of conceptual, and theoretically-driven empirical research, and consists of a group of economists and international business scholars who share a common approach to analyzing multinational enterprise and foreign direct investment. Some are based in the Department of Economics and in Henley Business School at the University of Reading, England, but membership is international. The Reading School builds upon the pathbreaking theoretical work of Peter Buckley and Mark Casson on internalization theory. This was complemented by simultaneous work by John Dunning as he developed the eclectic paradigm of international business as an envelope explanation containing three principal drivers of foreign direct investment, comprising ownership (O); location (L); and internalization (I). The Reading School approach continues through the work of its academic disciples around the world, as well as through The John Dunning Centre at Henley Business School, University of Reading, under the directorship of Rajneesh Narula.
The springboard theory or springboard perspective is an international business theory that elucidates the unique motives, processes and behaviors of international expansion of emerging market multinational enterprises. Springboard theory was developed by Luo and Tung (2007), and has since been used to examine EM MNEs. At the core of this theory is the argument that EM MNEs systematically and recursively use international expansion as a springboard to acquire critical resources needed to compete more effectively against their global rivals at home and abroad and to reduce their vulnerability to institutional and market constraints at home. These efforts are systematic in the sense that “springboard” steps are deliberately designed as a grand plan to facilitate firm growth and as a long-range strategy to establish more solidly their competitive positions in the global marketplace. They are also recursive because such “springboard” activities are recurrent and revolving.
Holger Görg is a German economist who currently works as Professor of International Economics at the University of Kiel. Moreover, Görg also leads the Kiel Center for Globalization and heads the Research Area "Global Division of Labour" at the Kiel Institute for the World Economy. In 2009, he was awarded the Gossen Prize for his contributions to the study of firms' decisions to invest, export and outsource parts of their value chains abroad.
Prof. Niron Hashai is a Professor of Strategy and International Business at Reichman University. In September 2021 he was appointed as the dean of the Arison School for Business Management in Reichman University.