UGF Lecture 3

Management > Global Firm > Dunning

Dunning

Ownership advantages (OA) represent the first element of Dunning's eclectic framework. the concept comes from Hymer's work and argues that for a firm to become an MNE it requires a competitive advantage.

There are two models in this theory:

1. MNEs cannot exist in perfect competition.
2. MNEs are most likely to exist in concentrated markets

Model 1

Model 1 - perfect

Model 1 - imperfect

Model 2