| Professional business service (PBS) firms are growing in importance worldwide. The objective of this dissertation is to explore the sources of competitiveness, for the world's PBS leaders. It is also to determine if competitive advantages flow mainly from home or foreign operations. The ten industries examined include accounting, advertising, architecture, engineering, information technology, investment/financial services, law, market research, management consulting, and reinsurance. The study is an expansion of a previous manufacturing study (Dunning, 1996).; The Porter diamond framework was used to categorize a variety of competitive advantages into four main categories. These categories were addressed in a seven-page survey, which was sent around the world. The responses were used to examine six main hypotheses, using multiple regression analysis. The most statistically significant determinants of the foreign sourcing of competitiveness were also explored.; According to results, the extent to which PBS managers perceive they gain competitiveness, by tapping foreign (intangible) resources/capabilities, is a function of degree of multinationality, firm size, intellectual capital intensity, and home country size. The perception that competitiveness is enhanced by tapping foreign demand pressures is a function of intellectual capital intensity, licensing requirements, and home country size. The extent to which managers perceive they gain competitiveness, by tapping foreign inter-firm rivalry pressures, is a function of degree of multinationality, and home country level of development. Finally, the perception that competitiveness is enhanced by forging linkages abroad is a function of degree of multinationality.; Other areas explored include the roles of governments, the preferred modes of foreign involvement, and the effects of the Internet, for enhancing competitiveness. Trends toward heterarchical structures, globally integrated business strategies, and spatial clustering are supported. Overall, study results depict a growing trend toward the foreign sourcing of competitive advantages, and strategic asset-seeking/augmenting FDI.; This dissertation serves to incrementally add to IB theory, and its explanatory value for PBSs. It has been demonstrated that, given minor sector-specific modifications, existing IB theory can be applied to knowledge-intensive PBS firms. In conclusion, research in professional service MNEs does not require new theories. |
