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Multinational Corporations and Foreign Direct InvestmentAvoiding Simplicity, Embracing Complexity$
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Stephen D. Cohen

Print publication date: 2007

Print ISBN-13: 9780195179354

Published to Oxford Scholarship Online: May 2007

DOI: 10.1093/acprof:oso/9780195179354.001.0001

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 A Better Approach to Understanding Foreign Direct Investment and Multinational Corporations

 A Better Approach to Understanding Foreign Direct Investment and Multinational Corporations

Chapter:
(p.11) 1 A Better Approach to Understanding Foreign Direct Investment and Multinational Corporations
Source:
Multinational Corporations and Foreign Direct Investment
Author(s):

Stephen D. Cohen

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780195179354.003.0002

In addition to introducing the main integrating themes of this book, this chapter explains how they are distinct from those studied in the usual approach to analyzing multinational corporations (MNCs) and foreign direct investment (FDI), and why they can help to provide a more accurate, better balanced understanding of these increasingly important phenomena in the global economy. The core thesis is that a reconciliation of the two diametrically different assessments of MNCs and FDI requires that MNCs be recognized as heterogeneous entities and FDI as a heterogeneous process. The presence of hundreds of thousands of foreign subsidiaries inevitably mean an infinite variety of effects and cost-benefit ratios. Disaggregation becomes an essential analytic tool in the absence of homogeneity. Most generalizations are inaccurate or distorted. Appreciation for the dominance of perceptions in a subject area with few absolute truths is presented as an essential analytic approach. Another basic thesis argues that these international business phenomena are more effects, than causes of change. Finally, the argument is made that even accurate evaluations of MNCs and FDI tend to have a short life-span because they are dynamic and constantly changing, not static, phenomena.

Keywords:   heterogeneity, perceptions, disaggregation of data, global economy, foreign subsidiaries

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