SMG professors Christian Asmussen and Nicolai Foss have provided a commentary on Niron Hashai and Peter Buckley’s (HB) article “Competitive Advantage and the Existence of the Multinational Corporation: Earlier Research and the Role of Frictions” in which they take issues with the reasoning of the paper.
Abstract of commentary
This article provides a counterpoint to Hashai and Buckley’s article ‘Is competitive advantage a necessary condition for the emergence of the multinational enterprise?’ We agree with their conclusion that it is, in fact, not a necessary condition, but argue that the theoretical reasons behind this are different and more diverse than the ones they propose. We suggest that much extant economic theory is, in fact, consistent with their view that firms may internationalize without owning or achieving competitive advantages, and we model various other ways in which imperfections can drive their overall result. We strongly applaud Hashai and Buckley’s attempt to add more rigor to international business theory and call for future work to extend this debate.
Link to the complete pdf version.