Internalization theory: an unfinished agenda

Casson, M. ORCID: https://orcid.org/0000-0003-2907-6538, Porter, L. and Wadeson, N. ORCID: https://orcid.org/0000-0001-8140-9307 (2016) Internalization theory: an unfinished agenda. International Business Review, 25 (6). pp. 1223-1234. ISSN 0969-5931 doi: 10.1016/j.ibusrev.2016.03.007

Abstract/Summary

Internalization theory is usually applied at the firm level to analyse FDI, licensing and subcontracting, but this paper extends it to the industry level. It synthesises internalisation 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 internalisation strategy of each firm.

Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/61847
Identification Number/DOI	10.1016/j.ibusrev.2016.03.007
Refereed	Yes
Divisions	Arts, Humanities and Social Science > School of Politics, Economics and International Relations > Economics
Publisher	Elsevier
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