Historic View Home Markets of Multinational Firms

6 Historic View Home Markets of Multinational Firms 

As Takeuchi, Porter (1986) states, presence in lead markets has particular advantages for companies, because lead markets supply them with the latest information on customer needs, technological developments and conpetitive moves. The effect of proximity highlighted in section 2.5 couples the market context with tlie international conqjetitive advantage of domestic firms. The lead role of a market will affect all domestic companies and give them an international competitive 

The strength of the US firms in the postwar era has been explained predominantly by the home market advantage of large market size. The largeness of US market justifies the immense investments for high-tech innovations that were not profitable for European markets. In addition, the large US market enabled economies-of-scale that made US innovations more price competitive compared to innovations adopted in European countries. Another theory that comprises both the local innovation adoption and the international diffusion of innovations is the intema-tional-life-cycle theory. This theory will be reviewed briefly. 

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