Date of Award

1987

Degree Type

Dissertation

Degree Name

Doctor of Philosophy

Abstract

This thesis examines the question of managerial/organizational advantages as a cause of foreign direct investment (FDI) and thus as the basis of multinational enterprises (MNE's). Three approaches to this question are taken: historical, analytical, and empirical. Historically, managerial/organizational advantages as a cause of MNE's is traced back to the early work of Southard and Phelps in the 1930's. Analytically, three models of embodied-in-managers, intangible assets are advanced, of which two are non-strategic. In the strategic model, foreign direct investment is shown to be a dominant strategy when entry by former managers (defectors) is threatened. These models make use of Penrose's notion of managerial constraint. Also, two models of the R & D/advertising MNE are provided.;These models yield a number of predictions which are tested against data on four hundred and fifty U.S. firms, obtained from Standard and Poors', Moody's, and U.S. Department of Commerce. Various measures of managerial/organizational efficiency, R & D, advertising, plant costs and tariffs are constructed, and regressed against measures of firm multinationality. The tests are performed using a general sample and a Canadian and European subsample. The results are encouraging. Measures of managerial/organizational ability are found to have the predicted effect on U.S. foreign direct investment.

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