ABSTRACT
Mark Casson has defined a multinational enterprise (MNE) as a firm which internalizes international markets for intermediate products. It should be emphasized that some 85 per cent of all international direct investment in services is in two groups of services, namely trade-related activities, and banking and finance (UNCTC 1988). There have been numerous studies of the internationalization of banking and financial services, some of which have specifically sought to explain the extent, pattern and ownership structure of international production. The chapter looks at the implications that the characteristics of MNE activity in services have for the theory of foreign production in services. While partial theories of Foreign Direct Investment (FDI) and international production may be relevant to explaining some kinds of service activity by MNEs, only a generalized paradigm, can provide an adequate analytical framework for examining all kinds of MNE service activities.
