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Transactions cost economics and the multinational enterprise An Assessment Export

Journal of Economic Behavior & Organization, Vol. 7, No. 1. (March 1986), pp. 21-45.

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This paper applies transactions cost principles to the multinational enterprise in order to ascertain its distinctive properties as a mode of economic organization. The analysis helps identify just when and where contractual alternatives to the multinational firm are likely to be viable. This turns out to depend upon the nature of the technology, the regime of appropriability within which the firm operates, and the characteristics of the markets in question. Transactions cost analysis is also extended to the multinational enterprise-host country relationship. Implications for management and public policy are derived.


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