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Dunning (2000)Management > Global Firm > Lectures > Independent Research > Dunning > Outward FDI > OA >Theories > Today's OAs > LA
LAThe concept is that an optimum locational portfolio of assets is a competitive advantage unto itself. In the knowledge-based global economy, scholars need to look at LAs in a new way. For example, distance related transaction costs, knowledge accumulation and interactive learning are issues to be dealt with. Where once firms looked to countries which had natural resources, they now search for "distinctive and non-imitable set of location bound created assets", including successful indigenous firms, with which a joint venture could be initiated. Some nation states are aware of such opportunities and are providing improved infrastructures and economies to enhance local OAs and encourage those from abroad. Exchange rates can affect the timing of FDI. For example, China has a low rate on the yuan and so MNEs are flooding into the country.
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