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 act describes FDI as opportunities of oligopolistic MNE to create actions that stage barriers to entry modes of competitors (Mclintock , 2001 . With oligopolistic markets , the actions of the market drawing card are emulated by other riotouss , therefore creating mutual threats a .Internalization theoryThe internalization theory is based from the Marshallian paradigm of imperfect disputation (Jean-Pascal , B . 1993 ) or uneven development as spread out by Hymer . Imperfect markets occurrences cause a sloshed to beat up its own (internal ) monopolistic activity to overcome the situation . The watertight provoke internalize across national boundaries to become an MTE and frankincense the process causes FDIb .Eclectic theory (OLI paradigmEclectic theory by John Dunning d raws 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 belong to indicate economic realism . Shubik (2001 ) is also another head-on of the use o f equilibrium models to reconcile minuscular and macroeconomic theories . The eclectic theory describes resource market , foreign and strategic asset seeking behaviours of firms , as objectives for FDI .

The theory describes monomania advantages where firm specific capital or knowledge prevails in form of human capital , for instance expa! triates and managers , technologies , patents , reputation and cushiony touch . The major advantage is that such capital can be replicated across the nations without lose of value or divided at bottom the firm without incurring costly transaction costs . consort to Trevino and Grosse (2002 , firms exhibit a high appetite for FDI when they have more innovations and are technology intensive , the firm managers are more experience in international barter , the firm is more profitable and there was high pecuniary leverage , in front the global expansion diaphragm and variation in the home-country currentness . Next , Localization advantages put a firm at heart reach...If you want to pull a full essay, order it on our website: BestEssayCheap.com

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