Eclectic paradigm

Eclectic paradigm

A theory that posits three types of advantages benefiting a multinational corporation: ownership-specific, location-specific, and market internalization advantages.

Eclectic Paradigm

An approach to analyzing whether it is beneficial for a company to make a foreign direct investment. The eclectic paradigm considers three factors. The first factor is whether a comparative advantage exists for the product the company wishes to develop in the foreign country. The second factor considers whether there is an advantage to developing that product in one country instead of another. Finally, the third factor considers whether it would be better for the company to develop the product in that foreign country itself rather than outsource development to a local company already in that country.
References in periodicals archive ?
Our model is an extension of these previous studies as we are capitalizing strongly on the eclectic paradigm of international production (Dunning 1988, 1993a).
They constitute an extension of the eclectic paradigm, It suggests centers of excellence as a potentially important mechanism for a subsidiary to develop subsidiary specific advantages.
This paper presents evidence of a new level of MNE advantage, subsidiary specific advantage, an extension of the eclectic paradigm.
This article uses the eclectic paradigm as a model to analyze ancient international trade and attempts to show that the major characteristics of MNEs were a part of the Assyrian business organizations of the time.
In order to clarify the conditions that must be fulfilled before a company locates production in other countries, we present and discuss Dunning's eclectic paradigm, the so-called OLI-model (e.
It uses the eclectic paradigm of Dunning, (6) also known as the ownership-location-internalization advantages (OLI) framework, adjusted to the specific circumstances of Russian capital in the Visegrad Four.
Other approaches include the work of the Uppsala School (Johanson and Wiedersheim-Paul, 1975; Johanson and Vahlne, 1977) on the Evolutionary Model and the economic perspectives supported on the Internalization and Transaction Costs (Williamson, 1975; 1981; Buckley and Casson, 1976; Rugman, 1980; Hennart, 1982, 1988) and Dunning's Eclectic Paradigm (Dunning, 1977, 1981, 1988).
It is related to Dunning's (1988) "asset (ownership) advantages" in the eclectic paradigm and selects firms that have chosen to commit resources across borders, thus becoming international.
The eclectic paradigm is widely regarded as an overarching explanation of international production (Dunning, 2000).
Conceptual foundation topics include key hypotheses that make internationalization theory the general theory of international strategic management; the new eclectic paradigm and international business strategy; and the multinational enterprise as a global factory.
The importance of Dunning's extensive work, carried out over fifty years of academic life, and of his contributions, is evident in current references to his earlier work (DUNNING, 1958, 1972, 1973, 1977) on the Eclectic paradigm and on the rationale of multinational enterprises and their investments abroad (DUNNING, 1981b, 2000).
The IDP stems from Dunning's eclectic paradigm framework of international production or what has become known as the OIL framework (Dunning, 1988a, 2001).