Internalisation of product-specific assets: The first dimension of internalisation of nonfinancial assets (indicated by the left-hand axis in Fig.
Internalisation of activity-specific assets: A second internalisation process dimension (indicated by the upper axis in Fig.
Internalisation of customer-specific assets: The third, and last, internalisation process dimension (indicated by the right-hand axis in Fig.
As a general rule, internalisation of non-financial assets of local operators pertains to specific products (product families), value-adding activities, or customers (customer groups).
x] = focal MNE's degree of internalisation (in country x);
The equation emphasises the close interrelationship between internalisation of financial and non-financial assets.
After having conceptualised gradual internalisation we can now address the question of how, in practice, MNE managers can stage the internalisation process by putting in place options for gradual internalisation.
Options for Gradual Internalisation in Relation to Financial Assets (Equity)
Internalisation of equity is well-described in the international joint venture literature, although the focus has mainly been on institutional factors as determinants of changing ownership structures (see e.
From the perspective of gradual internalisation, such optional buyout arrangements, negotiated and assented to from the outset, are of particular interest.
Our presentation of practical examples of options for gradual internalisation will follow the 3-dimensional categorisation of non-financial assets outlined in the previous section.
Internalisation of product-specific assets (user rights, licensees): The entrant MNE, after having operated in a country with different licensing or other contractual arrangements, might move to acquire--or rather, withdraw--the user rights originally handed over to, for example, the local licensee or franchisee.