Two Canadian economists, Stephen Hymer[8] and John McManus, [9] independently noted the relevance of internalization, and their contribution is the subject of debate.
Alan M. Rugman[10] linked internalization theory to his earlier work on market imperfections, applying it empirically in a North American context.
Jean-Francois Hennart [11] subsequently developed a variant of the theory that emphasised the interplay of headquarters authority and local autonomy within the firm.
[12] Internalization theory was used by John Harry Dunning as one of the components of his eclectic paradigm or OLI model.
This was disputed by internalization theorists on the grounds that if quality control and transfer pricing are sufficient, then ownership advantage cannot be necessary.
The United Nations Conference on Trade and Development (UNCTAD) was strongly influenced by internalization theory and the eclectic paradigm.
[19] It persuaded political leaders to encourage inward investment as a source of the new technologies required for economic development, thereby reversing their previous attitudes.