Internationalization of TNCs from the extractive industries: A literature review

The literature on the nature, shape and logic of internationalization of extractive industry TNCs is rather fragmented and poorly developed. This is a mounting problem since extractive industries are not only becoming increasingly important, but their operations have also become increasingly controversial. This article takes stock of three types of approaches towards internationalization. First traditional intrinsic motives, which represent an ‘international management’ angle and focuses on the resource-seeking, efficiency-seeking and strategic asset-seeking nature of extractive TNCs. Secondly, traditional extrinsic motives, which represents a more political economic angle towards extractive industries, and which builds on a bargaining perspective of internationalization. Thirdly, a modern extension of extrinsic motives to internationalization will be added, which considers the increasing role of Non-Governmental Organizations as factor in shaping the internationalization trajectories of extractive industries. This approach represents a ‘stakeholder’ approach to firm strategies. It considers the societal position of firms and considers the ‘license to operate’ or the normative position of transnational corporations. A correct understanding of the dynamics of internationalization of extractive industry TNCs requires an integrative approach of extrinsic as well as intrinsic motives. This article delineates the most important ingredients of such an approach.