Theories of international trade, foreign direct investment and firm internationalization: a critique

It has been suggested that there is a lack of consensus regarding the conceptual domain of cross‐national studies. That said, the theoretical focus of such scholarly activities has tended to reflect the multidisciplinary nature of the field. By far the most significant contributions to knowledge in the area can be sourced to the international economics, international finance and international business literatures. The proliferation in focuses and the diversity of empirical studies to be found within these literatures, demonstrates the wealth of understanding that can be attributed to the research of cross‐national commercial activities and operations. Attempts to explicate many of the dominant theories within these literatures. Contributions to the macro level of analysis can be found in the form of theories of international trade. Alternatively, micro theories engage the organization as the level of analysis and consideration is given to both the foreign direct investment decision process and pattern pursued by firms in internationalization. Discusses the nature and emphasis of these theories in the form of a critique.