What is Dunning's eclectic theory of Foriegn direct investment?

Answer 1

• It suggests that by dynamizing the paradigm, and widening it to embrace asset-augmenting foreign direct investment and MNE activity it may still claim to be the dominant paradigm explaining the extent and pattern of the foreign value added activities of firms in a globalizing, knowledge intensive and alliance based market economy.
• As the international business environment became increasingly complex and sophisticated, companies developed a much richer rationale for their worldwide operations.
• Scale economies, ballooning R&D investments, and shortening product life cycles has transformed many industries into global rather than national structures. They have made worldwide scope of activities not a matter of choice, but an essential prerequisite for companies to survive in those businesses.

Bartlett, C. A., & Beamish, P. W. (2011).Transnational Management: Text, Cases, and Readings in Cross-Border Management (6th ed.). New York: McGraw-Hill/Irwin.