Critically compare and contrast three theories of the multinational Essay

Critically comp ar and contrast three theories of the multinational firm. Which outstrip explains firm behaviour and why - Essay ExampleThe primary drive operating hindquarters their finding to outspread are the cost benefits and profit potentials which lie in different locations (Maheshwari, 1997, p. 246). However, there are authorized aspects which influence the profit and cost factors in a certain region. Those are the very elements which instigate the business community to spread out. In fact, theories have been framed by eminent observers in the past, to comprehend the factors which actually run away the production decisions of trans-national companies. Three fundamental factors are ownership, location and internalisation aspects which taken together form the meaning of OLI Theory of International Production. This however, is part of the neo-classical school of thought (Taylor & Thrift, 1986, p. 9). Likewise there is the Marxist economic guess or the Neo-Imperialist view s which support the decisions taken by trans-national companies to spread out their businesses to different nations around the world. Capitalist economies black market to accumulate a large volume of resources at home which they are restricted from making white plague of at home due to restrictions imposed over their employment. Hence, they have little option but to aim profit out of their surpluses through deploying them across national borders. Thirdly, the Neo-Fundamentalist Marxist principles say that the primary enticement behind spreading out their businesses is that the industries which gradually acquire a monopolistic position, start enjoying the advantage of huge surpluses. repayable to a limited scope for employing them in the nation where they belong, the industrialists deploy them in foreign lands where they have greater prospects of reaping profits (Jenkins, 1987, p. 447-451). The present paper discusses the similarities and differences between each of the three typ es of economic theories stated above to measure out the factors which induce foreign investors towards expanding their businesses across nations. Finally, an evaluation about the theory most applicable in consideration of business houses today will be made as a concluding note. Chapter 2 theoretic Framework 2.1 Marxist or the Neo-Imperialist economic theory According to the views of Marxist economists, the developed and developing economies are complementary to one another and make up the entire global system. However, they also emphasise that the last mentioned are usually the ones who are exploited by the former so that there is a continue outflow of surplus resources from the reserves of developing nations to the already burgeoning stock of the developed nations. The essence of the theory is the monopolization of industrial houses which leads to an accumulation of huge sums of profits in the capitalist nations. On the other hand, the prevalence of anti-trust laws restricts an amplification of their businesses within the domestic frontier through forming cartels. Thus, the surpluses which are reaped stay idle and hence, attain a moribund rate of growth which is not desired by the private producer (Jenkins,