Abstract
The conventional economic theory of international business well explains the stylised facts relating to the growth of horizontally integrated multinationals in high-technology industries during the 1950s and 1960s (Buckley and Casson, 1976; Dunning, 1981; Hymer, 1976; Kindleberger, 1969). It is less successful, however, in explaining some more recent developments (Borner, 1986). These include: 1. the emergence of a new international division of labour, based on off-shore processing in newly-industrialised countries (NICs), according to which a production process is split up into constituent activities dispersed over developed countries and NICs; 2. the rapid growth of multinational operations in the service sector during the 1970s — especially banking, professional business services, retailing and tourist-related industries; 3. the growing prominence of joint ventures and other collaborative arrangements involving enterprises in both the public and private sectors of global industries; and 4. the growing importance of Japanese foreign direct investment (FDI) in the world economy.
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