Dunning (1977)

Management > Global Firm > Lectures > Independent Research > Dunning > Market imperfections > OLI - OA

OLI - OA

The eclectic framework is firm, rather than country specific.

A firm’s production facilities may be fully or partially located in the source country, host country, in a third country, or a combination of all three.

A firm has to be both willing and able to supply foreign and domestic markets from a foreign location. This depends on three interdependent factors:

1. Ownership-specific advantages - Assets can be tangible, such as technology, and intangible, including skills and knowledge.
2. Location-specific advantages - Assets are immobile and include factors such as government intervention, taxes, skilled and unskilled workforce, and culture.
3. Internalisation - Internalising assets when the external market is imperfect

OLI - OA + LA

OLI - I

OLI - I (market failure)

Tenets

OLI