3.3 From OLI to LLL, replacement or complement?
Compared to OLI framework, LLL is more dynamitic especially in explaining FDI form newcomer and latecomer who according to OLI framework, has not enough O advantage then would not employ FDI.
For the discussion of whether LLL is a replacement of OLI or not, Dunning (2006) stated that “LLL framework complement and add to the richness of the OLI framework rather than replace it”.
Dunning (2006)’s comment toward LLL framework argued that OLI has its continuous usefulness in explaining firm competitive advantage of latecomers. The difference is only in this case, firms’ competitive advantages is “follow” its internationalization rather than “lead” it. Furthermore, Dunning addressed that the investment …show more content…
The natural resource seeking FDI aims at natural resource supply such as commodities and materials that firm need in its production (Cui st al., 2007). For developing countries’ MNEs, rich resource of energy and material in other countries (including developed countries such as Australia and Canada) is one of their motives to invest outbound (Buckley et al., 2007). The market seeking FDI is used to explore foreign market and the market potential and size are factors MNCs considering when employ such investment(Cui st al., 2007). To lower the cost of labor, natural resource or capital, MNEs can apply efficiency seeking FDI to foreign countries(Cui st al., 2007). Last intention is strategic asset seeking FDI, it is distinct from other motives in that serve firms long term strategy to enrich its frim competitive advantage (Cui st al., 2007; Mayer, 2015). Assets that pursuing in the investment could be intangible such as research and design technology, brand and organization management knowledge (Buckley et al., 2007; Cui st al., 2007; Mayer, 2015).
Different entry modes are served to MNEs’ strategic intentions. Among different approaches, strategic alliance and merger and acquisition (M&A) are two modes of operation can be used when developing countries’ MNCs practicing asset-augmenting FDI (Cantwell & Narula, 2001; Lundan& Hagedoorn,
Compared to OLI framework, LLL is more dynamitic especially in explaining FDI form newcomer and latecomer who according to OLI framework, has not enough O advantage then would not employ FDI.
For the discussion of whether LLL is a replacement of OLI or not, Dunning (2006) stated that “LLL framework complement and add to the richness of the OLI framework rather than replace it”.
Dunning (2006)’s comment toward LLL framework argued that OLI has its continuous usefulness in explaining firm competitive advantage of latecomers. The difference is only in this case, firms’ competitive advantages is “follow” its internationalization rather than “lead” it. Furthermore, Dunning addressed that the investment …show more content…
The natural resource seeking FDI aims at natural resource supply such as commodities and materials that firm need in its production (Cui st al., 2007). For developing countries’ MNEs, rich resource of energy and material in other countries (including developed countries such as Australia and Canada) is one of their motives to invest outbound (Buckley et al., 2007). The market seeking FDI is used to explore foreign market and the market potential and size are factors MNCs considering when employ such investment(Cui st al., 2007). To lower the cost of labor, natural resource or capital, MNEs can apply efficiency seeking FDI to foreign countries(Cui st al., 2007). Last intention is strategic asset seeking FDI, it is distinct from other motives in that serve firms long term strategy to enrich its frim competitive advantage (Cui st al., 2007; Mayer, 2015). Assets that pursuing in the investment could be intangible such as research and design technology, brand and organization management knowledge (Buckley et al., 2007; Cui st al., 2007; Mayer, 2015).
Different entry modes are served to MNEs’ strategic intentions. Among different approaches, strategic alliance and merger and acquisition (M&A) are two modes of operation can be used when developing countries’ MNCs practicing asset-augmenting FDI (Cantwell & Narula, 2001; Lundan& Hagedoorn,