The eclectic theory of international production: A case study of the international hotel industry

Abstract

This paper presents comprehensive data on the growth, structure and forms of involvement of multinational enterprises in the international hotel industry, and uses this data to provide empirical support for the eclectic theory of international production. Our understanding of the international hotel industry is that the ownership of a hotel often has the characteristics of portfolio investment and that the owners may have little knowledge of hotel operations. In these circumstances they will invariably employ a professional management company to run the hotel under a long term contract providing them with full control over the operation of the hotel. A particular feature of this paper is therefore to distinguish between, what we term, ‘equity‐based control’ and ‘contract‐based control’ of the enterprise and to point out the implications of this distinction for the analysis of the multinational enterprise. Copyright © 1981 John Wiley & Sons, Ltd.