Dunning's Accumulation Theory

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Dunning’s eclectic paradigm (1973, 1979, 1981, 1988) sought to redress some of the criticisms geared towards the various theories of international production which, more often than not, were regarded as being incomplete in that they focused only on one aspect of international production, namely either the ownership aspect or the location dimension. As Cantwell (1988, pp26) rightly pointed out: “The eclectic paradigm was not intended to be a complete synthesis; rather, it was intended to provide an analytical framework for empirical investigations and also to provide a framework for comparisons between theories, by establishing the common grounds or the points of contact between them, and clarify the relationship between different levels of…show more content…
• the MNE had to retain control over their network of assets through the internalization of such ownership advantages; • thirdly, given the decision by the firm to internalize its operations, the ensuing decision would thus relate to choosing an appropriate location which would ensure that it would be profitable for the firm to use the above advantages in conjunction with some factor inputs (for example, cost of labour) outside its home country; otherwise foreign markets would be served entirely by exports and domestic markets by domestic production. 2.2.6 Technological Accumulation Theory Kogut (1983) among others, have argued that although the possession of ownership advantages which permit the establishment of international operations by multinationals, yet, it is their ability to continually innovate and update such ownership advantages which becomes more fundamental in the long run in that it permits such firms to retain its competitive edge. 2.3 Empirical Literature The discussion hereunder pertains to undertaking an empirical review of the various determinants of FDI. 2.3.1. Market Size and Growth…show more content…
For instance, Edwards (1990) and Jaspersen et al. (2000) found that real GDP per capita to be inversely related to FDI/GDP. In a similar vein, Nigh (1985) delineated a weak positive relationship between FDI and growth for the less developed nations and a weak negative interplay for developed countries. Ancharaz (2003), in his study of African countries, found a positive impact for the full sample and for non-Sub-Saharan nations but an insignificant relationship in the case of the Sub-Saharan

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