Problems Associated with the Growth of International Firms

A RJE article on the problems associated with the globalization of international firms.The term “international firm” is used in this paper to describe a business organization that is engaged in production in a number of countries through branches, subsidiaries, or affiliates, which may or may not be separate corporate entities in the several countries in which they operate. The term “organization” implies that the entire group, including the head office as well as the various types of subsidiary units,* 1 is operated within an administrative framework which knits the whole together in such a way that the general policies and administrative and financial procedures of the group are reasonably consistent and coherent throughout the firm. Individual subsidiaries may have considerable autonomy in their own operations, but if they operate entirely independently of the group as a whole they are better treated from the point of view of the growth of the firm as a simple investment by the parent companies and an extension of its financial influence than as an integral part of the industrial organization, or “firm”.2 It should be clear, therefore, that we shall not be concerned with financial firms nor with firms that merely import and export; we are concerned with firms that engage in production in a number of countries and whose activities are organized within a coherent administrative framework

Spillback Effects of Expansion When Product-Types and Firm-Types Differ

Contrary to perspectives that credit firms with only limited abilities to undertake significant change successfully, recent research has demonstrated that firms often improve their performance after undertaking major expansion to their operations. In this paper, we build on a study by Mitchell and Singh (1993) to test for differences in expansion effects, depending on whether the new goods substitute for old products and whether the firm is a generalist or specialist participant in the industry. The analysis helps us understand when a business can undertake major change successfully. The results have implications for ecological and other definitions of the core of a business and highlight the necessity for firms to undertake changes even at considerable risk to their existing operations.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/68398/2/10.1177_014920639502100105.pd

Economic Analysis of Knowledge: The History of Thought and the Central Themes

Following the development of knowledge economies, there has been a rapid expansion of economic analysis of knowledge, both in the context of technological knowledge in particular and the decision theory in general. This paper surveys this literature by identifying the main themes and contributions and outlines the future prospects of the discipline. The wide scope of knowledge related questions in terms of applicability and alternative approaches has led to the fragmentation of research. Nevertheless, one can identify a continuing tradition which analyses various aspects of the generation, dissemination and use of knowledge in the economy