Flying Geese Paradigm Summary

Foreign domestic investments (FDIs)are investments made by a country or Enterprise in a foreign market. According to Dunning and Lundan (2008), and enterprise is considered MNE when it operates in one or more than one foreign market in the business form of a new business setup or acquisition of another’s business assets or mergers. The rise and growing role of multi-national enterprises from the Asia pacific enterprises was seen in the global economy for the past 50 years, it got more significant in the past 30 years when Asia leaped into success. Changes in government policies to lower the control on trade and cross-border investments encouraged enterprises to go outbound, resulting in growth of international mergers and acquisitions, inward

From the era of Zaibatzus to Keiretsus, the changes and reform of business framework in Japan encountered much changes along the way. It is the leader of FDIs in Asia, the country was named as a leader of “The flying geese Paradigm” by Akamatsu, it refers to the pattern of development whereby Japan was referred as the leader of the geese pack (Asia nations), leading the industrializing economies, followed by the other countries in Asia like China’s NIEs and ASEAN4 in the process of their late developing economies. It began small scale FDIs from the 1950s till the 1970s before it went full scale (Komiya and Wakasugi,1991). Main FDIs were on resource development in Asia’s developing countries starting from the 1950s, before shifting its focus to manufacturing and commerce. It imports raw materials that was scarce or not available in Japan and exported goods made

Japan as a late industrialised nation seems to relate well to the OLI model.

Toyota is one of the world’s largest car manufacturers. It started an overseas sales office in the US in 1957, it exported the first Japanese passenger car, Crown Sample car in the same year. Toyota went into a joint venture overseas manufacturing plant with General Motors in 1984 (Toyota Corporation, 2017).

China, the second largest economy in the world, is considered the factory of the world as it is the largest producer. The government encourages firms to globalise and many China MNCs are state owned or are supported financially by the state-owned banks and many diplomatic ties determines the localisation choices by the Chinese MNCs. China gained strong foothold in Africa with its FDIs due to their resource seeking move.

Korea is fourth largest economy in Asia, dominated by family-owned conglomerates which contributes to the economy with the government’s support in the industries that is favoured for the nation’s