Data Management

Using History To Help Refine International Business Theory: Ownership Advantages And The Eclectic Paradigm

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Executive Summary

In John Dunning's eclectic paradigm firms need to have ownership, location, and internalization advantages in order to cross borders and engage in foreign direct investment. By drawing on historical evidence on the evolution of a group of leading marketing-based multinationals in consumer goods, this paper claims that, despite its richness, the eclectic paradigm, and in particular the concept of 'ownership advantages', needs to be revised and extended, to take into account different levels of institutional analysis. For the eclectic paradigm to give a rounded view of the internationalizing firm it needs to acknowledge the critical importance of firm-specific ownership advantages such as the role of the entrepreneur.

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