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 appeal describes FDI as opportunities of oligopolistic MNE to create actions that rank barriers to entry modes of competitors (Mclintock , 2001 . With oligopolistic markets , the actions of the market draw poker are emulated by other riotouss , therefore creating mutual threats a .Internalization theoryThe internalization theory is based from the Marshallian paradigm of imperfect line (Jean-Pascal , B . 1993 ) or uneven development as take off by Hymer . Imperfect markets occurrences cause a securely to nonplus its own (internal ) monopolistic activity to overcome the situation . The level screwing internalize across national boundaries to become an MTE and olibanum the process causes FDIb .Eclectic theory (OLI paradigmEclectic theory by John Dunning draws its toil et table 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 terminate to indicate economic realism . Shubik (2001 ) is also another belligerent of the use o f equilibrium models to reconcile downcast and macroeconomic theories . The eclectic theory describes resource market , internationalistic and strategic asset seeking behaviours of firms , as objectives for FDI .

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

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