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Edith Penrose and a learning-based perspective on the MNE and OLI

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  • Christos Pitelis

    (University of Cambridge)

Abstract

and Key Results We apply insights from Edith Penrose’s work to extant theory of the multinational enterprise (MNE) as enveloped by John Dunning’s Ownership, Location, Internalization (OLI) Paradigm. We suggest that Penrose’s knowledge/learning-based approach has important implications on the nature of, and the interactions between, O, L and I, and it helps endogenize and integrate the three elements of Dunning’s triad in the context of a dynamic, and strategic perspective of the MNE. More importantly, a learning-based perspective adds a cognitive dimension to the MNE and OLI. This supports a forward looking, synchronic decision making view, that may lead to apparently sub-optimal decisions, taken in view of anticipated changes, along-side strategic behaviour, aiming to effect such change, once decisions have been reached. A Penrosean-inspired knowledge/learning-based perspective helps render the OLI more dynamic, strategic and forward looking.

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  • Christos Pitelis, 2007. "Edith Penrose and a learning-based perspective on the MNE and OLI," Management International Review, Springer, vol. 47(2), pages 207-219, March.
    • Handle: RePEc:spr:manint:v:47:y:2007:i:2:d:10.1007_s11575-007-0012-6
    DOI: 10.1007/s11575-007-0012-6
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    1. Christos Pitelis & Alain Verbeke, 2007. "Edith Penrose and the future of the multinational enterprise: New research directions," Management International Review, Springer, vol. 47(2), pages 139-149, March.
    2. McWilliam, Sarah E. & Kim, Jung Kwan & Mudambi, Ram & Nielsen, Bo Bernhard, 2020. "Global value chain governance: Intersections with international business," Journal of World Business, Elsevier, vol. 55(4).
    3. Li, Peter Ping, 2010. "Toward a learning-based view of internationalization: The accelerated trajectories of cross-border learning for latecomers," Journal of International Management, Elsevier, vol. 16(1), pages 43-59, March.
    4. Christos N. Pitelis, 2011. "Foreign Direct Investment and Economic Integration," Chapters, in: Miroslav N. Jovanović (ed.), International Handbook on the Economics of Integration, Volume III, chapter 1, Edward Elgar Publishing.
    5. Leymann, Gunnar & Lundan, Sarianna, 2023. "From structural to transition effects: Institutional dynamism as a deterrent to long-term investments by MNEs," International Business Review, Elsevier, vol. 32(3).
    6. Hutzschenreuter, Thomas & Horstkotte, Julian, 2013. "Managerial services and complexity in a firm’s expansion process: An empirical study of the impact on the growth of the firm," European Management Journal, Elsevier, vol. 31(2), pages 137-151.
    7. Chris Wagner, 2020. "Deducing a state-of-the-art presentation of the Eclectic Paradigm from four decades of development: a systematic literature review," Management Review Quarterly, Springer, vol. 70(1), pages 51-96, February.
    8. Christos N. Pitelis & David J. Teece, 2010. "Cross-border market co-creation, dynamic capabilities and the entrepreneurial theory of the multinational enterprise," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(4), pages 1247-1270, August.
    9. Alex Mohr & Georgios Batsakis & Zita Stone, 2018. "Explaining the effect of rapid internationalization on horizontal foreign divestment in the retail sector: An extended Penrosean perspective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(7), pages 779-808, September.
    10. Dutta, Dev K. & Malhotra, Shavin & Zhu, PengCheng, 2016. "Internationalization process, impact of slack resources, and role of the CEO: The duality of structure and agency in evolution of cross-border acquisition decisions," Journal of World Business, Elsevier, vol. 51(2), pages 212-225.
    11. Christos N. Pitelis & David J. Teece, 2018. "The New MNE: ‘Orchestration’ Theory as Envelope of ‘Internalisation’ Theory," Management International Review, Springer, vol. 58(4), pages 523-539, August.
    12. Surdu, Irina & Mellahi, Kamel, 2016. "Theoretical foundations of equity based foreign market entry decisions: A review of the literature and recommendations for future research," International Business Review, Elsevier, vol. 25(5), pages 1169-1184.
    13. Pitelis, Christos, 2009. "Edith Penrose’s ‘The Theory of the Growth of the Firm’ Fifty Years Later," MPRA Paper 23180, University Library of Munich, Germany.
    14. Jones, Geoffrey & Pitelis, Christos, 2015. "Entrepreneurial Imagination and a Demand and Supply-side Perspective on the MNE and Cross-border Organization," Journal of International Management, Elsevier, vol. 21(4), pages 309-321.
    15. Christos N. Pitelis, 2007. "A Behavioral Resource-Based View of the Firm: The Synergy of Cyert and March (1963) and Penrose (1959)," Organization Science, INFORMS, vol. 18(3), pages 478-490, June.

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    More about this item

    Keywords

    Penrose; Learning; MNE; OLI;
    All these keywords.

    JEL classification:

    • L0 - Industrial Organization - - General
    • M0 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General

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