The Theory of International Business
Economic Models and Methods

Authors: Mark Casson



Presents reformulation of the theory of the firm applied to international business

Addresses popular misconceptions in IB regarding economics

Includes models essential for analyzing business behavior in a global economy

Demonstrating why economic modelling is so important in understanding international business, this stimulating and highly original book sets out a new and exciting research agenda in international business studies. The author explains what economic models are, how they are constructed and the way in which they can be used. It illustrates how models clarify important issues in international business – explaining empirical anomalies, analyzing strategies and evaluating government policies towards multinational firms. There are detailed discussions of monopoly and competition in the global economy; the international division of labour; supply chain coordination; and the strategic implications of sunk costs in R&D. Based on this discussion, the book proposes a radical reformulation of the theory of the firm as applied to international business.

Table of contents

Front Matter

The Relationship Between Economics and International Business Studies

Introduction to Modelling Techniques

Introduction to Monopoly

Introduction to Location

Division of Labour and Modularisation

Analysis of Ownership

Modelling Contractual Arrangements

Global Rivalry

Extensions of the Models

The Management of the Firm

Conclusions: A Model-Building Agenda

Back Matter

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