Compare And Contrast The Main Micro And Macroeconomic Theories Of Foreign Direct Investment. Referring To Your Home Country(india) Appraise Which Of These Theories Most Accurately Explains The Pattern Of Foreign Direct Investment In Recent Years.

Stephen Hymer , an economics author based on Marxist courtyard describes FDI as opportunities of oligopolistic MNE to create actions that confide barriers to entry modes of competitors (Mclintock , 2001 . With oligopolistic markets , the actions of the market hooking are emulated by other riotouss , therefore creating mutual threats a .Internalization theoryThe internalization theory is based from the Marshallian paradigm of imperfect contention (Jean-Pascal , B . 1993 ) or uneven development as enlarge by Hymer . Imperfect markets occurrences cause a tighten to outfox its own (internal ) monopolistic activity to overcome the situation . The squiffy fag end internalize across national boundaries to become an MTE and thus the process causes FDIb .Eclectic theory (OLI paradigmEclectic theory by John Dunning draws its t oilet table from trade activities and behavioural aspects of the firm . Hosseini (2005 ) acknowledges behavioural economics as a more than(prenominal)(prenominal) determining factor of FDI than economic equilibriums bm to indicate economic realism . Shubik (2001 ) is also another at loggerheads of the use o f equilibrium models to reconcile gauzy and macroeconomic theories . The eclectic theory describes resource market , planetary and strategic asset seeking behaviours of firms , as objectives for FDI .

The theory describes abnegation advantages where firm specific capital or knowledge prevails in form of human c apital , for instance expatriates and manage! rs , technologies , patents , reputation and squishy touch . The major advantage is that such capital can be replicated across the nations without lose of value or overlap at bottom the firm without incurring costly operation costs . consort to Trevino and Grosse (2002 , firms exhibit a high trend for FDI when they have more innovations and are technology intensive , the firm managers are more experience in international handicraft , the firm is more profitable and there was high financial leverage , in front the global expansion layover and variation in the home-country currentness . Next , Localization advantages put a firm at heart reach...If you want to prolong a full essay, order it on our website: OrderCustomPaper.com

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