Which of the following concepts helps explain how location factors affect the direction of FDI?
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, suggests that FDI is driven by three factors: ownership advantages, location advantages, and internalization advantages. Location advantages refer to the benefits a firm gains from investing in a specific location, such as natural resources, skilled labor, favorable regulations, or access to markets. Therefore, the direction of FDI is determined by the location factors that contribute to a firm's competitiveness and profitability.

Which of the Following Concepts Helps Explain How Location Factors