Recent Trends in International Business: a New Analysis

Abstract

The conventional economic theory of international business well explains the stylised facts relating to the growth of horizontally integrated multinationals in high-technology industries during the 1950s and 1960s (Buckley and Casson, 1976; Dunning, 1981; Hymer, 1976; Kindleberger, 1969). It is less successful, however, in explaining some more recent developments (Borner, 1986). These include:

• 1. the emergence of a new international division of labour, based on off-shore processing in newly-industrialised countries (NICs), according to which a production process is split up into constituent activities dispersed over developed countries and NICs;

• 2. the rapid growth of multinational operations in the service sector during the 1970s — especially banking, professional business services, retailing and tourist-related industries;

• 3. the growing prominence of joint ventures and other collaborative arrangements involving enterprises in both the public and private sectors of global industries; and

• 4. the growing importance of Japanese foreign direct investment (FDI) in the world economy.