A critical review against Dunning's Eclectic Theory

INTRODUCTION It is true of everything that the first steps ate two the near important and the most difficult. To begin with, theorization consists of a desexualise of definitions of concepts. The sanctioned concepts underlying the eclectic theory of the multinational initiative (MNE)(1) are currently being criticized by the internalisation theorists(2) in that the ownership advantage is double counting, that is, the internalization and location factors are necessary and suitable to rationalize the existence and growth of the MNE. The controversy seems to train a natural examination of the concept of the ownership advantage. However, the examination should extend advertize afield. Our object glass in this paper is to assess critically the three basic concepts in the eclectic theory, i.e., the ownership advantage, the internalization advantage, and the location advantage and to suggest the beginnings of an ersatz framework to adopt with the MNE and FDI (i.e., foreign dir ect investment). REDUNDANCY OF THE OWNERSHIP ADVANTAGE some Features of the Electic Theory First of all, we moldiness set up the visualise of our examination. The eclectic theory, Mark I, as advocated by Dunning is as follows [Dunning 1981:79]: 1. It (i.e., the firm) possesses tone ending ownership advantages vis-a-vis firms of other nationalities in serving particular markets.

These ownership advantages largely take the form of the possession of impalpable assets, that are, at least for a period of time, exclusive or specific to the firm possessing them. 2. Assuming condition 1 is satisfied, it must(prenomi nal) be more beneficial to the enterprise po! ssessing these advantages to use them itself forward than to sell or lease them to foreign firms, that is, for it to internalize its advantages by dint of an extension of its own activities rather than externalize them through licensing and clan contracts with independent firms. 3. Assuming conditions 1 and 2 are satisfied, If you require to get a full essay, order it on our website: BestEssayCheap.com

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