Stephen Hymer

Stephen Herbert Hymer (* 1934 in Montreal ; † 1974 near Montreal) was a Canadian economist.

Life and achievement

Hymer examined the activities of international companies . In his dissertation in 1960, he developed an approach to explaining direct investment, which is now known as the theory of monopoly advantage . The work was published after 1976, however. Hymer died in a car accident in 1974.

His analyzes

Stephen Herbert Hymer can be considered one of the first authors to look at the growth and behavior of multinational companies. His preoccupation with the subject of MNEs stems from the fact that he criticized the fact that contemporary interest rate theory, as used in economics, is unable to explain the international foreign direct investment of national companies. The interest in a new and more realistic theory of international business activity by companies that had previously only operated nationally was of decisive importance. However, Hymer assumed that MNEs would particularly address their market power (today this is discussed under "company-specific advantages"). One of the main criteria here was that Hymer clearly saw that an investor has a great interest in controlling the company receiving the investment and influencing management decisions. The motives for foreign direct investment are not arbitrage effects, but rather higher returns. Hymer distinguishes direct investments and their reasons into the following motives:

• The control motif

While portfolio investments are mainly made for profit reasons, direct investments, according to Hymer, offer the possibility of influencing activities in the host country. The control options not only affect own units abroad, but also the competitive situation. This explains acquisitions abroad that aim to eliminate a competitor.

• The motive of monopoly advantage

This motive provides an answer to the question of why direct investment is used as a control mechanism. Hymer argues that a monopoly situation in the home country, which results from company-specific competitive advantages, can thus be transferred to foreign markets.

• The motive for diversification

The diversification provides Hymer not in the center of his considerations. Rather, it is viewed as a positive and comparatively insignificant side effect of direct investment.

The reasons for company-specific advantages include economies of scale or market imperfections (lack of or weak competition on the goods or factor markets). Their implementation enables the company to overcome entry barriers in foreign markets and, moreover, to create new market entry barriers vis-à-vis other national and international companies.

swell

• SH Hymer: The International Operations of National Firms: A Study of Direct Foreign Investment. PhD dissertation 1960. The MIT Press, Cambridge, Mass 1976, ISBN 0-262-08085-0 .
• M. Fuchs, G. Apfelthaler: Management of international business activities. New York / Vienna 2009, ISBN 978-3-211-75614-0 .
• R. Cohen et al: The multinational corporation: A radical Approach. Papers by Stephen Herbert Hymer. Cambridge University Press, Cambridge 1979, ISBN 0-521-22695-3 .
• Michael Kutschker, Stefan Schmid: International Management. Oldenbourg 2006, ISBN 3-486-25879-6 .

Individual evidence

1. ↑ M. Kutschker, S. Schmid: International Management. Oldenbourg, Munich 2008.

Web links

• Stephen Herbert Hymer papers. (archives.yale.edu)