An Entrepreneurial Theory of the International Firm. An Austrian School Perspective

 The perspective of this book is the praxeological one of the misesian branch of the Austrian School. That is, the attempt to conceptualize the phenomenon of the firm is one in terms of human action. What types of human actions or what aspects of human action can be underpinned by the concept of the firm?

The praxeological approach has a few consequences at the level of exposition and analysis. Namely, the important overlap between the theory of the firm and that of the entrepreneur. Although the two, especially in the post-Coase era, are considered to be rather independent fields of investigation, we think that a theory of the firm which aims at explaining its central concept (the firm), must combine them.

For an adequate understanding – at the same time realist and theoretically coherent – of the manner in which entrepreneurs exert themselves in creating/initiation, extending, controlling, contracting or dismantling firms/enterprises the proper understanding of the framework in which all these take place is also necessary. Otherwise said, an entrepreneurial theory of the firm cannot start from models such as the theory of perfect competition within which the allocative activity usually associated with the entrepreneur is substituted by production functions or holistic-aggregate allocative organisms, functioning in an uncertainty free (or risk free, at least) context. On the contrary, the firm must be realistically theorized, as a phenomenon of the real free market, where real flesh and blood entrepreneurs decide the allocation of scarce resources under uncertainty, with everything implied by this perspective.

An important part of the present work is dedicated to the study of the firm at the intersection with the problems of international business, where the phenomenon of multinational corporations is of maximum import. In light of the above, the approach is again one starting from the entrepreneur.

Multinational companies become thus forms of manifestation of international entrepreneurs, seeking profit opportunities and advantageous business beyond the borders of domestic states. One of the main theses of the present book is that - although having certain peculiarities relevant for historical or case study – the international firm does not distinguish itself at the theoretical level from the domestic firm, and that, in the end, entrepreneurs – irrespective of the range of their operations – are moved by the same things and have at their disposal similar instruments from a theoretical-economic point of view.

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