Multinational Enterprises and the Growth of Services: Some Conceptual and Theoretical Issues

Abstract

This article sets out to identify first, the main competitive advantages of multinational enterprises (MNEs) in providing services; second, the way in which these advantages are used to best advance the strategic goals of MNEs and the reasons why the value added activities which these advantages generate are undertaken outside the home country of the M NE. The article also identifies some of the reasons for the growth of MNE involvement in the service sector over the lasttwo decades and, in particular, why foreign direct investment (FDI) has been the preferred route for organising cross-border activities involving services.