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The Theory of the Multinational Enterprise: An Application to Multinational Office Location

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  • J H Dunning
  • G Norman

Abstract

The forces that affect growth, location, and distribution in the service sector will have elements in common with those at work in manufacturing, but equally will exhibit certain unique features. This paper examines such forces in the specific context of location choices made by offices of multinational enterprises (MNEs). Such enterprises emerge in response to particular market imperfections and to exploit particular ‘ownership specific’ advantages. The nature of such ownership specific advantages is discussed with specific reference to MNE office location, and tested using data drawn from a survey of European offices of mainly US-based MNEs. It is shown that a distinction must be drawn between offices that provide a service for final consumption and those that provide a mainly coordinating role. The former types of office are shown to be heavily market oriented and to act in ways consistent with theory. The latter types of office are more complex, but again locate in ways consistent with theory; in particular they are influenced more by accessibility and by environment than by cost and geography.

Suggested Citation

  • J H Dunning & G Norman, 1983. "The Theory of the Multinational Enterprise: An Application to Multinational Office Location," Environment and Planning A, , vol. 15(5), pages 675-692, May.
    • Handle: RePEc:sae:envira:v:15:y:1983:i:5:p:675-692
    DOI: 10.1068/a150675
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    References listed on IDEAS

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    1. Dunning, John H, 1979. "Explaining Changing Patterns of International Production: In Defence of the Eclectic Theory," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 41(4), pages 269-295, November.
    2. Peter J. Buckley & Mark Casson, 1991. "The Future of the Multinational Enterprise," Palgrave Macmillan Books, Palgrave Macmillan, edition 0, number 978-1-349-21204-0, December.
    3. John H. Dunning & Matthew McQueen, 1981. "The eclectic theory of international production: A case study of the international hotel industry," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 2(4), pages 197-210, December.
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    Cited by:

    1. Mori, Tatsuo, 2002. "THE ROLE AND FUNCTION OF EUROPEAN REGIONAL HEADQUARTERS IN JAPANESE MNCs," EIJS Working Paper Series 141, Stockholm School of Economics, The European Institute of Japanese Studies.
    2. Henk Post & Celeste Wilderom & Sytse Douma, 1998. "Internationalization of Dutch accounting firms," European Accounting Review, Taylor & Francis Journals, vol. 7(4), pages 697-707.
    3. Virginia Gibson & Colin Lizieri, 2001. "Friction and Inertia: Business Change, Corporate Real Estate Portfolios and the U.K. Office Market," Journal of Real Estate Research, Taylor & Francis Journals, vol. 22(1-2), pages 59-80, January.
    4. Peter J. Taylor & Ben Derudder & James Faulconbridge & Michael Hoyler & Pengfei Ni, 2014. "Advanced Producer Service Firms as Strategic Networks, Global Cities as Strategic Places," Economic Geography, Clark University, vol. 90(3), pages 267-291, July.
    5. Mats Bergman & Per Johansson, 2011. "Foreign ownership and investment: do firms locate investments close to the headquarter?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(4), pages 621-642, November.

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