Monopolistic Advantage Theory

Manjula S. Salimath

In: Encyclopedia of Business in Today's World

Monopolistic Advantage Theory

  • Citations
  • Add to My List
  • Text Size

  • Entry
  • Reader's Guide
  • Entries A-Z
  • Subject Index

  • Monopolistic advantage theory, first proposed by S. H. Hymer in his doctoral thesis and later expanded by C. P. Kindleberger, explains the reasons multinational corporations (MNCs) are able to compete successfully against local firms. It is a microeconomic theory that makes the firm the center, as well as the cause, of the international movement of capital and goods.

    The monopolistic advantage theory elucidates why firms choose to internationalize their operations. Typically, MNCs are at a disadvantage compared to local firms because they have to cope with liabilities of for-eignness, lack of local know-how, high cost of acquiring this knowledge in other countries, etc. However, these costs are offset by the existence of certain “monopolistic” advantages possessed by the MNC. Deploying these advantages abroad allows the MNC ...

    Looks like you are not subscribed to have access to full content on this book.

    Please login or subscribe to get access.

    If your Institution does not have a subscription and you cannot access the full text of content on the site, find out how your Institution can subscribe.

    • Competitive Forces
    • Corporate Profiles
    • Countries
    • Cultural Environments
    • Economics of International Business
    • Economic Theories of International Business
    • Ethics, Corruption, and Social Responsibility
    • Export/Import Strategies
    • Foreign Direct Investment
    • Globalization and Society
    • Human Resource Management
    • International Accounting
    • International Finance
    • International Monetary System
    • International Trade
    • Legal and Labor Issues
    • Management and Leadership
    • Manufacturing and Operations
    • Marketing
    • Political Environments
    • Regional Economic Integration
    • Supranational and National Organizations
    • A
    • B
    • C
    • D
    • E
    • F
    • G
    • H
    • I
    • J
    • K
    • L
    • M
    • N
    • O
    • P
    • Q
    • R
    • S
    • T
    • U
    • V
    • W
    • X
    • Y
    • Z


      • Loading...
    Back to Top