Theories and Paradigms of International Business Activity

Theories and Paradigms of International Business Activity

The Selected Essays of John H. Dunning, Volume I

John H. Dunning

This volume contains a selection of John Dunning’s best known and highly acclaimed writings on the theory of international business activity. Spanning more than three decades, the 16 contributions trace the evolution of his thoughts and ideas as an economist, from his first article on the determinants of international production, published in 1973, to his most recent essay on relational assets, networks and global business activity, completed in 2002.

Chapter 7: The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions

John H. Dunning

Subjects: business and management, international business

Extract

Dunning 02 chap 5 10/7/02 11:57 am Page 199 7. The eclectic paradigm of international production: a restatement and some possible extensions* INTRODUCTION When the concept of the eclectic paradigm of international production was first put forward by the author in 1976 at a presentation to a Nobel Symposium in Stockholm on The International Allocation of Economic Activity,1 the intention was to offer a holistic framework by which it was possible to identify and evaluate the significance of the factors influencing both the initial act of foreign production by enterprises and the growth of such production. The choice of the word eclectic was an ambitious, yet deliberate one. It was meant to convey the idea that a full explanation of the transnational activities of enterprises needs to draw upon several strands of economic theory; and that foreign direct investment is just one of a number of possible channels of international economic involvement, each of which is determined by a number of common factors. It is accepted that, precisely because of its generality, the eclectic paradigm has only limited power to explain or predict particular kinds of international production; and even less, the behaviour of individual enterprises. 2 But this deficiency, if it is a deficiency, which some critics have alleged, could no less be directed at attempts to formulate a general, but operational testable, paradigm of international trade. The classical and neoclassical theories of trade, for example, while still having wide explanatory powers for most kinds of interindustry...

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