The Limits of Explanation: Testing the Internalisation Theory of the Multinational Enterprise

This chapter is an exploration of the difficulties of testing the internalisation approach in the modern theory of the multinational enterprise (MNE). It examines the structure of the theory and attempts to cover those factors that would refute the theory. Previous attempts to test the theory are examined in the third section and the chapter concludes with the view that there is a need to sharpen up the theory to allow crucial experiments and to discriminate between alternative approaches. The paper attempts to steer a course between complacency on the one hand and nihilism on the other and between excessive generality and over concentration on detail