The _____ states that combining location-specific assets or resource endowments and the firm's own unique assets often requires FDI and it also requires the firm to establish production facilities where those foreign assets or resource endowments are located.
A) strategic trade policy
B) integration approach
C) scramble theory
D) eclectic paradigm
E) infant industry argument

Question

Quizplus · Accepted Answer

The eclectic paradigm, also known as the OLI framework, states that firms need to combine ownership advantages (unique assets), location advantages (location-specific assets or resource endowments), and internalization advantages (FDI) in order to succeed in foreign markets. Therefore, the framework suggests that firms must establish production facilities in foreign locations where these location-specific assets or resource endowments are available.

The _____ States That Combining Location-Specific Assets or Resource Endowments