Location and the multinational enterprise: A neglected factor?

Location and the multinational enterprise: A neglected factor?

1. Goal

   • Describe changing global environment
     • And how that affects location of FDI
       • So, with a focus on 'L' of OLI paradigm

2. Why do MNEs invest abroad?

   • “Traditional” investment motives
     • Market seeking
     • Natural resource seeking
     • Efficiency seeking
   • “Modern” investment motive
     • Strategic asset seeking
       • Technical knowhow
       • Diversification
       • Management expertise

3. Changing global business environment

   • Dunning observes
     • 3 Trends
       • The emergence of intellectual capital as the key wealth creating asset in most industrialized nations
       • Increasing integration/globalization
         • How?
           • by advances in transport and communications technologies
           • and the reduction in trade and investment barriers
       • Increasing emphasis on ‘alliance’ capitalism
         • What is alliance capitalism?
           • main stakeholders collaborate intensively
             • intensifying intra-firm relationships between functional departments and management and labour
             • interfirm agreements between actors in the industry
     • 2 Reinforcing factors
       • Technological change
       • Renaissance of the market economy
         • Revival of global market because of emerging economies

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