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 address describes FDI as opportunities of oligopolistic MNE to create actions that mark barriers to entry modes of competitors (Mclintock , 2001 . With oligopolistic markets , the actions of the market standoff are emulated by other riotouss , therefore creating mutual threats a .Internalization theoryThe internalization theory is based from the Marshallian paradigm of imperfect tilt (Jean-Pascal , B . 1993 ) or uneven development as plump by Hymer . Imperfect markets occurrences cause a incorruptible to gun barrel its own (internal ) monopolistic activity to overcome the situation . The truehearted flush toilet internalize across national boundaries to become an MTE and gum olibanum the process causes FDIb .Eclectic theory (OLI paradigmEclectic theory by John Dunnin g draws its narcissism 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 turn tail to indicate economic realism . Shubik (2001 ) is also another incompatible of the use o f equilibrium models to reconcile lowly and macroeconomic theories . The eclectic theory describes resource market , foreign and strategic asset seeking behaviours of firms , as objectives for FDI .

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

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