OLI model

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The OLI model or OLI framework (OLI stands for Ownership, Location, and Internalization) is a theory in economics. It is a further development of the internalization theory of multinational corporations and was published in 1979 by John H. Dunning .

Property benefits

Specific advantages relate to the competitive advantage of a company seeking foreign direct investment . The greater the competitive advantages of the investing firms, the more likely they are to get involved in their foreign production.

Location advantages

Local incentives refer to the alternative countries or regions in which the value-adding activities of multinational companies are carried out. The more the immobile, natural or created resources that companies must use together with their own competitive advantages favor a presence in a foreign location, the more companies will choose to increase or exploit their specific advantages by engaging in foreign direct investment .

Benefits of internalization

Firms can organize the creation and use of their core competencies. The greater the net benefits of internalising cross-border intermediate product markets , the more likely a company will prefer to produce itself abroad rather than license the right to do so .

literature

  • John Cantwell, Rajneesh Narula (Ed.): International Business and the Eclectic Paradigm: Developing the OLI Framework . Routledge 2003. (Routledge Studies in International Business and the World Economy). Kindle edition

Individual evidence

  1. ^ A b Antje Hagen: German direct investments in Great Britain, 1871-1918 ( German , dissertation), Franz Steiner Verlag, Jena 1997, ISBN 3-515-07152-0 , p. 32.
  2. ↑ a b c d Michael J. Twomey: A Century of Foreign Investment in the Third World (Book), Routledge, 2000, ISBN 0-415-23360-7 , p. 8.
  3. ^ A b John H. Dunning: The eclectic paradigm as an envelope for economic and business theories of MNEactivity . In: International Business Review . 9, No. 2, 2000, pp. 163-190. doi : 10.1016 / S0969-5931 (99) 00035-9 .
  4. ^ Gray, H. Peter (2003). "Extending the Eclectic Paradigm in International Business: Essays in Honor of John Dunning"; Edward Elgar Publishing