Some countries have oil as a natural resource and BronzePlate Inc., based in Illinois, is considering building a facility in one of those foreign countries since it does not have easy access to oil near its manufacturing plant. Which theory of foreign direct investment provides an explanation for this decision?
A) eclectic paradigm
B) protectionism argument
C) product life-cycle theory
D) new trade theory
E) infant industry argument

Question

Quizplus · Accepted Answer

The eclectic paradigm, also known as the OLI framework, explains foreign direct investment by considering Ownership, Location, and Internalization advantages. In this case, the location advantage of having access to oil in a foreign country explains BronzePlate Inc.'s decision to build a facility there.

Some Countries Have Oil as a Natural Resource and BronzePlate