A New View of the Advantage of Multinationality

Abstract

Do multinational enterprises (MNEs) enjoy an advantage over national firms? Clearly, the fact that national and multinational firms do coexist indicates that MNEs do not necessarily enjoy an absolute advantage over national firms. Nevertheless it may be still be true that particular attributes of multinationality create value for MNEs which national firms cannot enjoy. Such value must be set against possible costs of multinationality. Whether MNEs do enjoy a net advantage over national firms in a particular sector or activity is dependent on the relative magnitudes of the cost and benefits of multinationality in the particular case. In this chapter we are interested in organisational attributes that may, ceteris paribus, generate advantages for MNEs.