Essay On OLI Eclecticism
CHAPTER ONE
INTRODUCTION:
PURPOSE OF THIS THESIS
1.1 Introduction
The study of the internationalisation process of emerging market multinationals (EMNCs) has gained prominence in the last two decades as a result of the recent economic growth and transformation witnessed in emerging markets (EM). The internationalisation phenomenon has attracted a great deal of interest from international business (IB) scholars (Athreye & Kapur, 2009; Hoskisson, Eden, Lau, & Wright, 2000; Hoskisson, Wright, Filatotchev, & Peng, 2013; Jormanainen & Koveshnikov, 2012). The outward foreign direct investment (OFDI) from emerging market was $11.9 billion in 1990 and increased to $170 billion on average between 2000-2008. By 2013 investment from emerging markets
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The OLI eclectic paradigm asserts that MNCs engage in foreign production to exploit three types of advantages, namely - ownership (O), location (L) and internalisation advantages (Dunning, 1981 1988). The OLI eclectic paradigm affirms that firms with specific ownership advantages which maybe tangible or intangible would capitalise on its specific ownership advantage to internalise its operation in a foreign market to achieve location advantage (Dunning, 1988). This thesis suggests that the specific ownership advantage of Nigerian firms which was accumulated in the home market motivated the firms’ internationalisation. Such advantages to include domestic market knowledge, physical and financial resources, network relationship, technological know-how, innovation and management experience. This thesis assumes that the Nigerian firms were motivated to internationalise to take advantage of the regional market opportunities and growth potentials. It is of the assumption that the Nigerian firms were motivated to internationalised to become regional players as a competitive strategy. The study suggests that the network relationships with different partners have enabled both the domestic growth and foreign expansion of the case companies such network relationship advantage provided the firms with technical-know and capabilities to follow their customers or be closer to their customers in foreign
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