The dynamic capability theory states that for a firm to invest overseas, it must have three kinds of advantages: ownership specific, internalization, and location specific.

Question

Quizplus · Accepted Answer

The dynamic capability theory focuses on a firm's ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments, rather than on the specific advantages (ownership, internalization, location) outlined in the eclectic paradigm or OLI framework by John Dunning, which describes the prerequisites for a firm to engage in foreign direct investment.

The Dynamic Capability Theory States That for a Firm to Invest