The Theory of International Business Economic Models and Methods

Demonstrating why economic modelling is so important in understanding international business, this stimulating and highly original book sets out a new and exciting research agenda in international business studies. The author explains what economic models

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Mark Casson

The Theory of International Business

Mark Casson

The Theory of International Business Economic Models and Methods

Mark Casson Department of Economics University of Reading Reading, United Kingdom

ISBN 978-3-319-32296-4 ISBN 978-3-319-32297-1 DOI 10.1007/978-3-319-32297-1

(eBook)

Library of Congress Control Number: 2016946226 © The Editor(s) (if applicable) and the Author(s) 2016 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. Printed on acid-free paper This Palgrave Macmillan imprint is published by Springer Nature The registered company is Springer International Publishing AG Switzerland

In memory of Alan Rugman: scholar, friend, colleague

PREFACE

AND

ACKNOWLEDGEMENTS

The ideas presented in this book have been gestating for a long time. The premature and unexpected death of my good friend Alan Rugman has stimulated me to reflect on how far theories of international business (IB) have changed in the forty years since we first met. Discussions with Peter Buckley have led me to ask whether these changes have been for the better or not. I have therefore resolved to set down what, in my opinion, the theory of IB might look like now if the direction originally charted had been followed up in a systematic way. IB scholars seem to have lost the initiative in theory development. In the 1970s and early 1980s, IB exported key ideas to economics, but now IB is largely an importer of ideas from other fields. IB scholars seem to think that concepts derived from strategic management and the resourcebased theory of the firm provide all the economics that is required to understand IB. This is a big mistake. A major objective of this book is to help to rectify this error. This book is based on a series of ‘Masterclass’ lectures delivered at the Henley Business School, University of Reading, in November 2015. The class was attended by an international group of scholars and students. I am grateful to the participants for giving up their valua