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Dunnings eclectic paradigm
Essay specific features
Written by:
Delores B
Date added:
June 6, 2015
Level:
University
Grade:
A
No of pages / words:
2 / 282
Was viewed:
8992 times
Rating of current essay:
Essay content:
Firm exploits the advantages itself rather than leasing to other firms.
Why internalise rather than licence to domestic firms?
- Uncertainty of price
- Uncertainty of quality of imports
- Imperfect markets
Gives advantage to control transactions itself
? Large firms internalise R&D to protect against predators and ensure good return
Location specific factors:
- Resources ? Human Capital, Raw Materials
- Pay less tax
- Political environment to conduct sensitive research
- Political Stability
- Markets
Advantages
Simplicity:
? applicable to most firms
? can explain the nature of most firms
Interrelatedness of three variables and how they can be applied separately or together...
displayed 300 characters
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German car industry in comparison to UK, Germany only has the O, therefore they don’t produce in UK (no L and I)
Eg. UBS in London: OLI met to come to UK.
Disadvantages
- Too many variables, all interrelated so cant be sure which is in O, L or I.
- Over – Optimistic, “can utilise all 3 and become an MNC” doesn’t take into account internal conflicts...
displayed 300 characters
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