John H. Dunning

Trade, Location of Economic Activity and the MNE: A Search for an Eclectic Approach

The main task of this paper is to discuss ways in which production financed by foreign direct investment, that is, that undertaken by multinational enterprises (MNEs), has affected our thinking about the international allocation of resources and the exchange of goods and services between countries. The analysis takes, as its starting point, the growing convergence between the theories of international trade and production, and argues the case for an integrated approach to international economic involvement, based both on the location-specific endowments of countries and the ownership-specific endowments of enterprises. In pursuing this approach, the paper sets out a systemic explanation of the foreign activities of enterprises, in terms of their ability to internalise markets to their advantage. It concludes with a brief examination of some of the effects which the MNE is allegedly having on the spatial allocation of resources, and on the patterns of trade between countries.

The eclectic paradigm as an envelope for economic and business theories of MNE activity

This paper updates some of the authors thinking on the eclectic paradigm of international production, and relates it to a number of mainstream, but context-specific economic and business theories. 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.

The Eclectic (OLI) Paradigm of International Production: Past, Present and Future

This article describes the origins, and traces the subsequent evolution of the eclectic paradigm from the mid-1950s to the present day. It does so in the light of the changing characteristics of MNE activity and of the global economic scenario. The article concludes by asserting that the eclectic paradigm still remains a powerful and robust framework for examining contextual specific theories of foreign direct investment and international production.

Explaining the International Direct Investment Position of Countries: Towards a Dynamic or Developmental Approach

ZusammenfassungEin dynamischer Ansatz zur ErklÄrung der sich im Wachstumsproze\ der LÄnder wandelnden Rolle der internationalen Direktinvestitionen. — Erörtert wird in diesem Artikel die Hypothese, da\ die Rolle eines Landes im Hinblick auf internationale Direktinvestitionen sowie die VerÄnderungen dieser Rolle durch die eklektische Theorie der internationalen Produktion erklÄrt werden können. In die Untersuchung gehen Daten über die Direktinvestitionen von 67 LÄndern wÄhrend der Periode 1967–1978 ein. Es zeigt sich, da\ es zwischen den Determinanten dieser Ströme und dem Niveau und der Struktur der wirtschaftlichen Entwicklung eines Landes eine systematische Beziehung gibt.RésuméUne approche dynamique d’expliquer le rÔle de l’investissement étranger direct pendant le processus du développement des pays. — Cet article explore la proposition que le rÔle d’un pays concernant l’investissement étranger direct et les changements de ce rÔle peuvent Être expliqués par la théorie éclectique de la production internationale. En utilisant les données sur les flux des investissements direct (ou les changements du stock de capital direct) de 67 pays sur la période 1967–1978, l’article aussi suggère qu’il y a une relation systématique entre les déterminants de ces flux et le niveau et la structure du développement économique d’un pays.ResumenExplicando la posición de inversiones directas internacionales de los países: hacia una explicatión dinámica o desarrollista. — En este artículo se explora la propositión que la posición de inversión directa international de un país y cambios en esa positión, pueden explicarse Útilmente por medio de la teoría ecléctica de la production international. Usando cifras de los flujos de inversiones directas (o cambios en el stock de capitales directos) de alrededor de 67 países para el período entre 1967 y 1978, se sugiere que hay una relatión sistemática entre los determinantes de estos flujos y el grado y estructura del desarrollo económico de un país.

Industrial Development, Globalization and Multinational Enterprises: New Realities for Developing Countries

Globalization has changed economic realities. First, the competences of multinational enterprises (MNEs) are becoming increasingly mobile and knowledge-intensive. MNEs thus give more attention to the availability and quality of the created assets of alternative locations. Second, among developing countries there are now considerable differences between the catching-up countries (e.g. newly industrialized countries) and falling behind , less developed countries. These developments have helped change the opportunity sets of both MNEs and host countries. Foreign direct investment (FDI)-based development strategies are now commonplace among less developed countries, but there is also increased competition for the right kinds of investment. In general, the balance in bargaining power has shifted in favour of the MNE, and less developed countries increasingly need to provide unique, non-replicable created assets to maintain a successful FDI-assisted development strategy.

Multinational enterprises and the globalization of innovatory capacity

Abstract This paper reviews the role of multinational enterprises as creators of technological capacity, and the extent to which they assist or inhibit the geographical dispersion of such capacity in the global economy. It then goes on to consider the impact of MNE activity on the technological goals of home and host countries, and concludes that much depends on the motives for and types of foreign direct investment, the size and economic structure of the countries concerned, and the technological and macroorganizational policies pursued by Governments.

Alliance capitalism and global business

Introduction. Part I. Alliance Capitalism Part II. Trade, Integration and Locational Issues Part III. Foreign Direct Investment, Industrial Restructuring and Competitiveness Part IV: The Japanese Connection Part V. The Age of Paradoxes

The R&D Activities of Foreign Firms in the United States

In recent years, considerable attention has been paid in the literature to the process of globalization and the increasing extent of economic integration between advanced industrial countries. In part, these events have been facilitated and fashioned by the activities of multinational enterprises (MNEs) as they have sought to rationalize and coordinate their production in various locations (United Nations, 1993). Initially, as firms engage in foreign direct investment (FDI), they tend to do so in comparatively low-value activities. If successful, these activities are followed by a forward and backward deepening along the value chain. Eventually, such vertical integration may embrace technologically sophisticated production and research and development (RD and there is considerable evidence (Casson, 1991; Pearce, 1989) that, over the last two decades, there has been a steady regionalization or globalization of highvalue activities from both developed and developing countries. However, a particular feature of the increasing foreign ownership of domestic R&D activities in the advanced industrialized countries is that in recent years it has increasingly occurred through the acquisition of existing innovatory assets rather than the setting up of new that is, greenfield R&D ventures. Moreover, such acquisitions have been prompted not so much by the desire of MNEs to exploit existing technological advantages as by a perceived need to protect these advantages or to acquire new ones. To this extent, such FDI in R&D activity is best described as strategic asset seeking FDI.1

Multinational Enterprises, Development and Globalization: Some Clarifications and a Research Agenda

This paper considers how economic globalization has affected opportunities and challenges for developing countries in following a multinational enterprise (MNE)-assisted development strategy, revisiting an earlier article by the authors. The growing share of industrial activity owned and/or controlled by MNEs has not—by and large—led to a proportional increase in sustainable domestic industrial growth. Particular attention is paid to how MNEs have responded proactively to globalization by modifying their strategies, spatial organization and the modalities by which they interact with host economic actors, and how these changes alter our understanding of MNEs and development. What has been learnt over the last decade about embeddedness, institutions, inertia, absorptive capacity, spillovers and linkages, and how they can explain the success of some countries (or regions) in promoting growth, and the failure of others, is examined. The need to link MNE and industrial policies systematically is highlighted. Attracting the “right kinds” of MNE activity remains important, but greater heterogeneity of MNE activity and host locations requires greater customization of policy tools.

Multinational Enterprises and the Growth of Services: Some Conceptual and Theoretical Issues

This article sets out to identify first, the main competitive advantages of multinational enterprises (MNEs) in providing services; second, the way in which these advantages are used to best advance the strategic goals of MNEs and the reasons why the value added activities which these advantages generate are undertaken outside the home country of the M NE. The article also identifies some of the reasons for the growth of MNE involvement in the service sector over the lasttwo decades and, in particular, why foreign direct investment (FDI) has been the preferred route for organising cross-border activities involving services.