According to Raymond Vernon,firms that have pioneered a product undertake FDI in other advanced countries when:

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Vernon's view is that firms undertake FDI at particular stages in the life cycle of a product they have pioneered.They invest in other advanced countries when local demand in those countries grows large enough to support local production.They subsequently shift production to developing countries when product standardization and market saturation give rise to price competition and cost pressures.Investment in developing countries,where labor costs are lower,is seen as the best way to reduce costs.

According to Raymond Vernon,firms That Have Pioneered a Product Undertake