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 coiffure barriers to entry modes of competitors (Mclintock , 2001 . With oligopolistic markets , the actions of the market haul are emulated by other riotouss , therefore creating mutual threats a .Internalization theoryThe internalization theory is based from the Marshallian paradigm of imperfect line of reasoning (Jean-Pascal , B . 1993 ) or uneven development as work out by Hymer . Imperfect markets occurrences cause a stanch to fig up its own (internal ) monopolistic activity to overcome the situation . The profligate shadow internalize across national boundaries to become an MTE and thus the process causes FDIb .Eclectic theory (OLI paradigmEclectic theory by John Dunning draws its dresser 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 apparent movement to indicate economic realism . Shubik (2001 ) is also another inimical of the use o f equilibrium models to reconcile dainty and macroeconomic theories . The eclectic theory describes resource market , transnational and strategic asset seeking behaviours of firms , as objectives for FDI .

The theory describes sobriety advantages where firm specific capital or knowledge prev ails in form of human capital , for instance! expatriates and managers , technologies , patents , reputation and loose touch . The major advantage is that such capital can be replicated across the nations without lose of value or share at bottom the firm without incurring costly deed costs . consort to Trevino and Grosse (2002 , firms exhibit a high list for FDI when they have more innovations and are technology intensive , the firm managers are more experience in international job , the firm is more profitable and there was high fiscal leverage , in front the global expansion item and variation in the home-country currentness . Next , Localization advantages put a firm at heart reach...If you want to derive a full essay, order it on our website: BestEssayCheap.com

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