Synopses & Reviews
Internalization theory, despite criticism of its empirical deficiency, has dominated the industrial organization approach to the multinational enterprise and its foreign investment decisions. Liu improves the empirical foundations of internalization theory through the elaboration of the foreign direct investment (FDI) signaling framework, which holds that a firm's foreign investment influences the perception of less-informed market participants. Liu expands the power of the signalling concept and internalization theory by providing additional explanations for corporate investment behaviors. Furthermore, he develops an empirical framework to test internalization, and presents results that support the theory.
Review
In this pathbreaking book, Professor Scott X. Liu makes one of the most important contributions to the literature on foreign investment since the 1960 dissertation of Stephen Hymer was published in 1976....This book is the first one to integrate signaling theory into the mainstream internalization paradigm of international business. It is full of useful insights and is a valuable contribution to the literature on the theory and operational management of the MNE. As such, it is an indispensable addition to the library of any serious researcher in the field of international business.From the foreword, Alan Rugman
Review
Scott Liu's book is a cogent review of the theory of the multinational firm. It provides fresh perspectives on the internalization decision. Professor Liu's work provides an important additional consideration to the foreign investment decision, namely its signaling value, not just for further internalized investment, but also for further expansion by other methods such as exporting and alliances. This is a significant theoretical and practical insight for global strategy. Professor Liu provides a good counterpoint to theory, with several practical company cases and illustrations.Farok J. Contractor Professor of International Business Rutgers University
Synopsis
Liu enhances internalization theory and shows that foreign direct investment decisions of multinational firms affect foreign investment patterns of other market actors with less information.
About the Author
SCOTT X. LIU is a consultant for the World Bank, actively involved in Chinese projects, and also a consultant for several major Asian multinationals.
Table of Contents
Illustrations
Introduction
The Multinational and Foreign Investment: Issues and Previous Theories
The Internalization Research in Its Current Direction
The Signaling Framework of Foreign Direct Investment
Modelling the FDI Signaling Effects
Evidence on Relations between MNE's Internalization and Externalization
Announcement of Foreign Investment and Its Valuation Effects
Theory of the Multinational Enterprise: Summary, Evaluation, and Future Direction
Bibliography
Index