Which of the following is a condition of Dunning's eclectic theory?
A) The firm must own a competitive advantage that overcomes competing against foreign firms in their markets.
B) Research and development costs must outweigh expenses related to foreign direct investment.
C) The firm must benefit more from outsourcing a service than controlling a foreign business.
D) Business activity must be more profitable in a domestic location than in a foreign location.

Question

Quizplus · Accepted Answer

Dunning's eclectic theory, also known as the OLI paradigm, suggests that for a firm to engage in foreign direct investment, it must own a competitive advantage (Ownership advantage) that overcomes the costs of operating in a foreign market. This advantage allows the firm to compete effectively against local firms.

Which of the Following Is a Condition of Dunning's Eclectic