Which of the following is true about Dunning's arguments?
A) Dunning rejects the argument of internalization theory that it is difficult for a firm to license its own unique capabilities and know-how.
B) Dunning suggests that to exploit such foreign resources, such as oil and other minerals, a firm must undertake licensing rather than FDI.
C) Dunning argues that it makes sense for a firm to locate production facilities in those countries where the cost and skills of local labor is most suited to its particular production processes, since labor is not internationally mobile.
D) Dunning's theory and its extensions help explain the imitative FDI behavior by firms in oligopolistic industries.
E) Dunning argues that combining location-specific assets or resource endowments with the firm's own unique capabilities always requires licensing.

Question

Quizplus · Accepted Answer

Dunning argues for the importance of the specific advantages that a firm possesses, such as proprietary technology, unique capabilities, and brand recognition, in determining whether FDI is the preferred mode of entry. He notes that labor is not internationally mobile, so it is important to locate facilities in countries where the cost and skills of local labor are most suited to the firm's production processes. This is consistent with the idea that firms should leverage their specific advantages to achieve a competitive advantage in the global marketplace. None of the other choices accurately reflect Dunning's arguments.

Which of the Following Is True About Dunning's Arguments