A theory that provides a three-tiered framework for a company to follow when determining if it is beneficial to pursue direct foreign investment. The eclectic paradigm is a theory in economics and is also known as the OLI-Model or OLI-Framework. It is a further development of the internalization theory and published by John H. Dunning in 1993.Internalization theory itself is based on the transaction cost theory.  This theory says that transactions are made within an institution if the transaction costs on the free market are higher than the internal costs.
Eclectic Paradigm. An approach to analyzing whether it is beneficial for a company to make a foreign direct investment. The eclectic paradigm considers three factors. The first factor is whether a comparative advantage exists for the product the company wishes to develop in the foreign country. The second factor considers whether there is an advantage to developing that product in one country instead of another. The eclectic paradigm is a theory in economics and is also known as the OLI-Model or OLI-Framework. It is a further development of the internalization theory and published by John H. Dunning in 1993. Internalization theory itself is based on the transaction cost theory. This theory says that transactions are made within an institution if the transaction costs on the free market are higher than the internal costs. 1 Internalization advantages (advantages by own production rather than producing through a partnership arrangement such as licensing or a joint venture) Firms may organize the creation and exploitation of their core competencies. Dunning Eclectic Paradigm. Offers a unifying framework for determining the extent and pattern of foreign owned activities, it posits that multinational activities are driven by three sets of advantages such as ownership, location and internalization. This had later been termed as (OLI) model.  VOLUME฀18฀฀฀฀•฀฀฀฀NUMBER฀1 Alan M. Rugman 1 Reconciling Internalization Theory and the Eclectic Paradigm Alan M. Rugman Abstract: The eclectic paradigm of Dunning (1980) (with its OLI and four motives for FDI framework) can be reconciled with the ﬁrm and country matrix of Rugman (1981). However, the ﬁt is not perfect. Reconciling internalization theory and the eclectic paradigm Article Published Version Rugman, A. M. (2010) Reconciling internalization theory and the eclectic paradigm. Multinational Business Review, 18 (2). pp. Eclecticism is a conceptual approach that does not hold rigidly to a single paradigm or set of assumptions, but instead draws upon multiple theories, styles, or ideas to gain complementary insights into a subject, or applies different theories in particular cases.  DEFINITION of 'Eclectic Paradigm'. A theory that provides a three-tiered framework for a company to follow when determining if it is beneficial to pursue direct foreign investment. The eclectic theory paradigm is based on the assumption that institutions will avoid transactions in the open market when internal transactions carry lower costs. The idea behind the Eclectic Paradigm is to merge several isolated theories of international economics in one approach. Three basic forms of international activities of companies can be distinguished: Export, FDI and Licensing. 1 Internalization advantages (advantages by own production rather than producing through a partnership arrangement such as licensing or a joint venture) Firms may organize the creation and exploitation of their core competencies. BREAKING DOWN 'Eclectic Paradigm'. In order for a direct investment in a foreign country to be beneficial, the following advantages must be present: 1. Product or company specific advantages, such as a comparative advantage. 2. Location specific advantages-where the company derives greater benefit through a foreign establishment. 3. The eclectic theory paradigm is based on the assumption that institutions will avoid transactions in the open market when internal transactions carry lower costs.
http://financial-dictionary.thefreedictionary.com/Eclectic+paradigm https://en.wikipedia.org/wiki/Eclectic_paradigm http://www.studymode.com/essays/Dunning's-Eclectic-Paradigm-1008231.html http://centaur.reading.ac.uk/6112/1/MBR_18_2_-1_FINAL.pdf https://en.wikipedia.org/wiki/Eclecticism http://www.investopedia.com/terms/e/eclecticparadigm.asp https://en.wikipedia.org/wiki/Eclectic_paradigm http://www.investopedia.com/terms/e/eclecticparadigm.asp
what is the eclectic paradigm