Presented by Professor Peter Liesch

Abstract

Globalising forces are changing the nature of business exchange and production in international markets.  The internationalisation of productive capabilities is presenting firms with new possibilities for configuring organisations and achieved competitiveness.  Outsourcing and offshoring of economic activities is seeing the disintegration of value chains that is altering the scale and the scope of firms and providing unprecedented opportunities for new firms and for existing firms.  The question of which transactions go where and why has been a longstanding puzzle asked by the transaction cost economists.  The location decision and the corporate boundary decision are at the core of the international business scholarly field.

In this presentation, I present a representation of the nature of the modern world economy that offers a framework to explain why we observe the current organisational configurations that shape our international business world.   I label this construction the worldwide market for market transactions and apply it to explain how the internationalisation of production has changed since the large internalised MNE revolutionised international business. The worldwide market for market transactions concept summarises those aspects of the changing world economy that are important in determining this changing nature of international business.

While imperfections in international markets have created the very nature of the international business transacting we observe, our modern world economy has evolved such that now the incentive exists to ‘go to the market’ rather than to internalise the transaction.  We will continue to observe how the modern firm advances with the internationalisation of productive capabilities coordinated through the worldwide market for market transactions, a defining feature of our modern world economy.

About AIBE Thought Leadership Discussion Series

Events in this series are held at the UQ Business School Executive Venue, Boardroom, 293 Queen Street, Brisbane unless otherwise specified.