Edith Penrose and a Learning-Based Perspective on the MNE and OLI

Abstract

This paper applies insights from Edith Penrose's work to extant theory of the multinational enterprise (MNE) as enveloped by John Dunning's Ownership, Location, Internalization (OLI) Paradigm. The paper suggests that Penrose's knowledge/learning-based approach has important implications on the nature of, and the interactions between, O, L and I, and it helps endogenize and integrate the three elements of Dunning's triad in the context of a dynamic, and strategic perspective of the MNE. More importantly, a learning-based perspective adds a cognitive dimension to the MNE and OLI. This supports a forward looking, synchronic decision making view, that may lead to apparently sub-optimal decisions, taken in view of anticipated changes, alongside strategic behavior, aiming to effect such change, once decisions have been reached. A Penrosean-inspired knowledge/learning-based perspective helps render the OLI more dynamic, strategic and forward looking.