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and Sugden, Roger, The nature of the Transnational firm, Pg 10). Amongst the most famous are the Hymer's theory of international production, the internalization theory put forward by Buckley and Casson, Dunning's Eclectic Paradigm, and the evolutionary theory given by Kogut and Zander. Hymer's theory is based on the assumption of market failure and market imperfection and he argues that firms internationalize to increase their market power. The internalization theory is based on transaction costs and market imperfection. Dunning's eclectic paradigm explains the nature of MNE's as to why and when firm decides internationalize or setup production abroad...
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