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 ?
On the economic side, the eclectic paradigm is the preeminent theoretical paradigm within International Business (Cantwell, Dunning, & Lundan, 2010).
The main objective of the paper is to empirically examine the impact of three important aspects of Eclectic Paradigm that is ownership, location and internalization on FDI inflows by using different variables for each sub-paradigm.
As an eclectic paradigm the OLI-model is a summary of various theories specifically related to the formation of multinational companies.
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).
The third filter is "Foreign Location Advantage." 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.
While the ICT chapters draw upon the endogenous growth theory, the FDI chapter mostly builds upon John Dunning's "eclectic paradigm".
The eclectic paradigm is widely regarded as an overarching explanation of international production (Dunning, 2000).
Formalizing internationalization in the eclectic paradigm. Journal of International Business Studies, 40, 58-70.
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 IDP stems from Dunning's eclectic paradigm framework of international production or what has become known as the OIL framework (Dunning, 1988a, 2001).
This taxonomy, known as the Eclectic paradigm, or simply as OLI, includes three vectors: ownership, location and internalization.