The transnational corporation and economics
from Grazia Ietto-Gillies and WEA Commentaries
There is now a very large body of literature on theories of the transnational corporation (TNC) and the subject has reached a suitably mature stage to have a history of economic thought about it.2 The first theory of the ‘International Firm and its Operations’ was developed in 1960 by Steven Hymer, a Canadian student working for a doctorate under the supervision of Charles Kindleberger at the Massachusetts Institute of Technology. A British scholar at the University of Reading was, contemporaneously. researching the effects of American investment in the UK. John Dunning later developed his own very successful theory (1977 and 1979) and continue to do theoretical and applied research in the field till his death a few years ago. Many theories and studies have been developed on both sides of the Atlantic in the intervening decades, in particular the so-called ‘Internalization theory’ by Peter Buckley and Mark Casson (1976) also at the Reading University. The theory has recently been updated by Casson (2018).
The subject of ‘International Business’ is now well developed and most theories of the TNC are developed and taught in its multi disciplinary context. However, the study of TNCs has not been fully accepted within the academic economics profession – including the non-orthodox academics – and is . . . read more