d internalisation advantages are gains from internalising the production/distribution by FDI as opposed to exporting, forming joint ventures, or buying inputs from external suppliers.
             By looking at the MNE's ownership characteristics, first I would like to separate the activities of the firms into two core activities: the knowledge-based activities and the labour-intensive activities. The electronic industry is obviously a highly knowledge based industry. The competitive advantage of the company rely in very large part to the research and development of new proprietary technologies, its expertise and technological know-how, its wealth of human capital, and its brand. On the other hand, to bring about the products, the firms must also engage in labour-intensive production processes.
             It is clear to see that the main competitive advantage of these electronics MNE's come primarily from its knowledge based activities and it enables the firms to expand its operations abroad. One distinct advantage of this is that it is easily transferable across great distances; new expansion overseas will benefit from knowledge-based assets (e.g. R&D, technology, etc.) that are generated elsewhere in the world (i.e. Japan) with little extra cost. Also, economies of scope exists since the knowledge-based assets of the firm will be jointly available across the different products: e.g. one plant building two products can share the same R&D costs resulting in lower average cost compared to when the plants are separate entities. Thus, irrespective of where the MNE might decide to operate, the ownership benefit of its strong knowledge-based asset will make it competitive against local rivals who cannot match the MNE's knowledge based superiority. This distinct global advantage through knowledge-based asset is the first motive the MNE may have to expand abroad.
             Secondly, we can see that on the production side the MNE, due to its size,...