John Dunning's Eclectic Paradigm Analysis

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The literature recognizes the insights and leadership of Professor John Dunning in developing the field of international business over the past four decades. Dunning built his eclectic paradigm upon the theory of internalization developed by Buckley and Casson (Dunning, 1988), and collectively they provide the cornerstones for multinational enterprise (MNE) theory (Verbeke, 2009). Since the 1970’s, explanations of MNEs’ spatial choices have gone through considerable change. Dunning’s eclectic paradigm is a synthesis of this scholarship, and continues to evolve to the present day. In this essay, I will briefly present Dunning’s eclectic paradigm, and offer a broad criticism of the paradigm as reviewed in the literature. I will then present other selected theories to explain foreign direct investment (FDI) in the 21st century. Finally, some brief non-­‐FDI based explanations to internationalization will be discussed.
2. Dunning’s Eclectic Paradigm
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Contextually, FDI emerged in the 1960’s and 1970’s as an international business entry strategy, and three primary theories explained how MNEs could use FDI to gain competitive advantage: monopolistic advantage theory, internalization theory, and Dunning’s eclectic paradigm (Cavusgil, Knight & Riesenberger,

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