Setting the Record Straight: Hymer, Internationalization Theory and Transaction Cost Economics

Abstract

Along with the rise and development of transaction cost economics, Stephen H. Hymer's works have recently become a matter of some controversy. This note clarifies the main issues in the controversy and explores the contributions of Hymer's theory of the MNE. A review of Hymer's works reveals that he had incorporated a Coasian theory of firms and markets in his theory as early as 1968. This note suggests that the genesis of transaction costs as applied to the MNE can be traced to Hymer.