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The MNE as the “crown of creation”?: a commentary on mainstream theories of multinational enterprises

Mats Forsgren (Department of Business Studies, Uppsala University, Uppsala, Sweden)
Mo Yamin (Alliance Manchester Business School, University of Manchester, Manchester, UK)

Critical Perspectives on International Business

ISSN: 1742-2043

Article publication date: 14 December 2022

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Abstract

Purpose

The purpose of this paper is twofold: to analyse what theories assume about multinational enterprises (MNEs) when they claim these are superior and to discuss possible explanations for why MNE superiority seems to be dominant in the international business (IB) research field.

Design/methodology/approach

A common theme in mainstream IB theories is that multinational enterprises (MNEs) are superior in terms of cost efficiency and innovativeness compared with other types of organizations. A closer look at transaction cost economics (TCE)/internalization theory, evolutionary theory and dynamic capability theory reveal a bias toward MNE supremacy because of how MNEs are conceptualized as firms and therefore fail to explain the essence of “multinational advantage”. These revelations and the strong dependence on the benevolence to provide unbiased data means that MNE supremacy posited by mainstream IB theories is as much a rationalized myth as an empirical fact.

Findings

Although mainstream theories differ when it comes to the building blocks that constitute MNE supremacy, they have one attribute in common: they are silent as to why MNEs are superior compared with, for example, domestic firms or other types of economic agents. Irrespective of whether the focus is the strength of the hierarchy, the skill of managers or a common identity, nothing in the theories tells us that these factors are more pronounced in MNEs than in other types of economic actors.

Originality/value

The paper deals with the issue of multinational advantage. It claims that mainstream theories of MNEs tend to assume, explicitly or implicitly, that MNEs are superior in terms of cost efficiency and innovativeness compared with other types of economic agents. The analysis demonstrates that this tendency is a consequence of how MNEs are conceptualized as firms in the different theories as well as of the strong dependence in IB research on the benevolence of MNEs to provide unbiased data. It is concluded that MNE supremacy posited by mainstream IB theories is as much a rationalized myth as an empirical fact.

Keywords

Acknowledgements

The authors gratefully acknowledge comments from two anonymous reviewers.

Citation

Forsgren, M. and Yamin, M. (2022), "The MNE as the “crown of creation”?: a commentary on mainstream theories of multinational enterprises", Critical Perspectives on International Business, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/cpoib-05-2022-0048

Publisher

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Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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