INTRODUCTION In recent years, students of the MNE have been criticized for paying insufficient attention to the determinants and impact of the foreign owned output of services. In one sense, this is a strange criticism as many of the 0 specific advantages of MNEs identified by scholars relate to their ability to create and internalize cross-border markets for intangible products, notably entrepreneurship, technology, management and marketing skills, and organizational capabilities. Indeed, Mark Casson (1987) has defined an MNE as a firm which internalizes international markets for intermediate products, and, as like as not, these products are likely to take the form of services.