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Dunning (2000)Management > Global Firm > Lectures > Independent Research > Dunning > Outward FDI > OA >Theories > Today's OAs > LA > Theories
TheoriesTraditional location theories (E.g. Weber, 1929) Market-seeking - demand related variables, such as size of market Resource-seeking - supply orientated variables, such as availability of natural resources Efficiency-seeking - supply orientated variables, like land, labour and infrastructure Strategy asset-seeking - location and price of created assets Theories related to the process of internationalisation (E.g. Vernon, 1966) Market and resource-seeking - using traditional variables, but also some firms-specific variables and transaction costs Theories related to presence of complementary assets (E.g. Teece, 1992) Spanning market, resource and efficiency-seeking reasons to engage in FDI, these theories search for activities which lower transaction costs and promote joint economies in innovation, production and marketing. Strategic asset-seeking - as above, but to improve existing OAs and strategic networking Theories related to oligopolistic behaviour and product cycle (E.g. Graham, 1975; Knickerbocker, 1973; Vernon, 1974) These theories cover all reasons for engaging in outward FDI, describing follow my leader tactics and other forms of oligopolistic behaviour. Theories of risk diversification (Rugman, 1979) These theories span market, resource and efficiency-seeking sources for FDI. They identify location-specific risks and argue that a firm will diversify its portfolio in order to minimise risk Knowledge-enhancing (dynamic) theories of location (E.g. Dunning, 1977) Spanning all reasons for outward investment, these theories explain location strategy in terms of improving LAs with regards to learning and continuous innovation. Firms will invest in countries where they can more easily upgrade core competences
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