Dunning suggests that FDI will occur when there is an ownership advantage, a location advantage, and an internalization advantage.

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John H. Dunning's Eclectic Paradigm (also known as the OLI Framework) suggests that for a firm to engage in Foreign Direct Investment (FDI), it must have an Ownership advantage (something unique to the firm that can be transferred abroad), a Location advantage (benefits of conducting activities in a specific foreign location), and an Internalization advantage (benefits of controlling the foreign business activity rather than contracting it out or licensing).

Dunning Suggests That FDI Will Occur When There Is an Ownership