Eclectic Paradigm Research Articles

Strategic Internationalization of BYD: A Case Study on Entry into the German EV Market Using the Eclectic Paradigm Framework

Strategic Internationalization of BYD: A Case Study on Entry into the German EV Market Using the Eclectic Paradigm Framework

Hymer and the theory of the MNE: A commentary

AbstractThis article provides a commentary on the paper by Pitelis and Piteli on Hymer as the pioneer of the theory of the multinational enterprise (MNE). I suggest that Stephen Hymer and his contemporary, John Dunning, also laid the foundation for an analysis of an international business (IB) system, which reaches well beyond the theory of the MNE and its strategy. I argue firstly that early IB theories, including Hymer's, which emerged from the late 1950s onwards, mostly had a holistic view of the IB system, of which the MNE was just one element. Secondly, I contend that both Hymer and Dunning developed from the outset some seminal ideas on the interrelationships that exist between the MNE and its strategy, on the one hand, and the wider economic and social environment in which firms are embedded, on the other. I suggest that Dunning's eclectic paradigm was intended as a framework for the study of the IB system in its entirety as a complex, relational system. Thirdly, while Hymer's ideas on cross‐border geographic hierarchy, uneven development and IB were highly original and remain relevant today, they need to be substantially updated and revised in the current IB context, as opposed to the context which prevailed in the IB system of the 1950s through to the 1970s.

Gillette’s Expansion to India through the Lens of Porter’s Diamond Model and Dunning’s Eclectic Paradigm

In 2005, Procter & Gamble (P&G) acquired Gillette for $57 billion, marking a significant milestone in consumer goods history. This analysis explores Gillette's strategic expansion into India, leveraging Porter's Diamond Model and Dunning's Eclectic Paradigm to evaluate its success and challenges. The study delves into the skilled workforce, local manufacturing, and innovative marketing strategies that facilitated Gillette's penetration into India's diverse and rapidly urbanizing market. Through local R&D and collaborations with e- commerce platforms, Gillette tailored its products to Indian consumer preferences, achieving substantial market share. The frameworks reveal how Gillette's global efficiency and local responsiveness enabled it to thrive amidst intense competition. The paper concludes with recommendations for sustaining this success through continuous innovation, vigilant market monitoring, and eco-friendly practices, while suggesting the applicability of these insights to other emerging markets.

The path to overcoming the liability of foreignness using the eclectic paradigm: evidence from China

PurposeThe purpose of this study is to examine different paths to overcoming the liability of foreignness. Based on the eclectic paradigm, the authors construct a theoretical framework comprising enterprise nature, location choice, entry mode and internationalization strategy.Design/methodology/approachThe paper uses fuzzy-set qualitative comparative analysis (fsQCA) method to test the framework with data covering 120 multinational Chinese subsidiaries in 34 host in 2019.FindingsThe results show that liability of foreignness (LOF) is multiple concurrency, equifinality and asymmetry. When investing in Belt and Road (B&R) countries, non-SEOs can weaken LOF by applying the greenfield mode and resource-seeking strategy, other MNEs can implement a market- or resource-seeking strategy via cross-border M&A to reduce LOF. But when investing in non-B&R countries with a strategic asset-seeking strategy, the LOF is increased. The B&R initiative can reduce the LOF effectively.Originality/valueThe authors construct a general framework to explain the paths of overcoming LOF by bridging the OLI with LOF and introduce fsQCA method into the field of LOF to make up for the shortcoming of existing test method by explaining the influence of more than three factors on LOF.

Influence of Political Stability on Foreign Direct Investment (FDI) Inflows in Nigeria

Purpose: The aim of the study was to assess the influence of political stability on foreign direct investment (FDI) inflows in Nigeria. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: The study indicated that political stability significantly influences foreign direct investment (FDI) inflows, as investors seek environments where their investments are secure and can yield predictable returns. Stable political conditions reduce risks related to government policy changes, expropriation, and civil unrest, thereby attracting more FDI. Conversely, political instability, marked by frequent government changes, corruption, and social unrest, deters investors due to increased uncertainty and risk. Studies have shown that countries with stable political climates tend to receive higher FDI inflows as they offer a safer, more predictable investment environment. Additionally, strong institutions and good governance practices further enhance investor confidence, leading to sustained economic growth through increased foreign investment. Implications to Theory, Practice and Policy: Institutional theory, risk theory and eclectic paradigm may be used to anchor future studies on assessing the influence of political stability on foreign direct investment (FDI) inflows in Nigeria. In practical terms, businesses and investors should focus on strengthening political institutions to create a stable and predictable environment. Policymakers play a crucial role in creating an environment conducive to FDI by prioritizing the implementation of political reforms that enhance stability. Ensuring free and fair elections, protecting civil liberties, and promoting effective governance structures are vital steps in this direction.

Multinational banking in Egypt: A case-study of the Ionian Bank, 1907–1939

Using records left by the Ionian Bank and other British multinational banks, as well as building on the extensive insights provided by leading business historians, the article contributes to the debate about how historical analysis can illuminate the study of international business. We shall achieve this by firstly evaluating the reasons why Ionian moved to Egypt, applying Dunning’s ‘eclectic paradigm’ to the analysis of a highly complex economic and political environment. We shall then address the organisational challenges of managing a geographically dispersed operation, highlighting the principal-agent issues associated with geographically dispersed businesses. This will be followed by an analysis of Ionian’s performance, explaining how the changing environment affected management’s ability to generate a consistent level of profitability.

Tax Incentive Mediates Foreign Direct Investment Determinants and Hotel Performance in Arusha Tanzania

This study seeks to explain the mediation effect of tax incentives on the relationship between ownership advantage (OWA), location advantage (LA), and internationalization (INT) factors determining Foreign direct investment (FDI) on hotel performance (HP). The study proposes the mediation model of tax incentives and FDI toward hotel performance in the Arusha region, of Tanzania. The proposed order of the model is that foreign direct investment depends on OWA, LA, and INT which may become applicable through tax incentives and tax incentives may further predict hotel performance. The measurement scale was borrowed from different studies and responded Includes hotel owners, managers, executive officers, and employees. Data were collected from August 2022 to February 2023; whereby 257 filled questionnaires were gathered and 236 were usable for further analysis. Final questionnaires were analyzed using SPSS and Structural Equation Modeling (SEM). The findings support that tax incentive fully mediates the relationship between ownership advantage and FDI toward hotel performance and partially mediates location advantage and internationalization on FDI investments toward hotel performance. The paper strengthens theoretical arguments by indicating the mediation effect of tax incentives on the relationship between the determinant of FDI, OWA, LA, INT, ICT, and hotel performance. Thus, this study adds to the literature as it has confirmed the eclectic paradigm theory.

Understanding the manufacturing reshoring decision-making content through the lens of the Eclectic Paradigm: a systematic literature review

Purpose This study aims to investigate the manufacturing reshoring decision-making content from an Eclectic Paradigm perspective. Design/methodology/approach Data were collected through a six-step systematic literature review on factors influencing manufacturing reshoring decision-making. The review is based on 100 peer-reviewed journal papers discussing reshoring decision-making contents published from 2009 to 2022. Findings In total, 80 decision factors were extracted and then categorized into resource-seeking (8%), market-seeking (11%), efficiency-seeking (41%) and strategic asset-seeking (16%) advantages. Additionally, 24% of these were identified as hybrid, which means that they were classified into multiple categories. Some decision factors were further identified as reshoring influencing factors (i.e. drivers, enablers and barriers). Research limitations/implications Scholars need to consider what other theories can be used or developed to identify and evaluate the decision factors (determinants) of manufacturing reshoring as well as how currently adopted theory can be further advanced to create clearer and comprehensive theoretical frameworks. Practical implications This research underscores the importance of developing clearer and more comprehensive theoretical frameworks. For practitioners, understanding the multifaceted nature of decision factors could enhance strategic decision-making regarding reshoring initiatives. Originality/value To the best of the authors’ knowledge, this is the first study to investigate the value and practicality of the Eclectic Paradigm in categorizing factors in manufacturing reshoring decision-making content and presents in-depth theoretical classifications. In addition, it bridges the gap between decision factors and influencing factors in the decision-making content research realm.

Nation branding as a tool to attract foreign direct investments: a case study of Qatar

Nation branding plays a critical role in attracting foreign businesses and, by extension, sustaining countries’ economic development and global competitiveness. Using Qatar as a lens for investigation, this research applied the single, embedded case study method. Purposive sampling with key decision makers in Qatar-based foreign companies representing diverse geographies and industries were used to understand the influence of nation branding on their investment location decision. The findings revealed five key thematic features of Qatar’s nation brand as an investment destination: socioeconomic prosperity, integrated global hub, activist engagement, collectivist culture, and high-end lifestyle. These brand characteristics were compared in relation to the Eclectic Paradigm’s locational advantage and the Anholt Ipsos NBI’s dimensions of exports, governance, culture/heritage, people, tourism, and investment/immigration. The dimensions exerted a strong effect on Qatar’s nation brand and varying levels of influence on FDI attraction. This research contributes to the nexus between nation branding and the FDI literature. Importantly, the results of the study provide useful guidance to government officials, policymakers, and public and private agencies involved in investment promotion. The findings will also prove relevant to foreign investors with regard to their international expansion and location choice.

Foreign Direct Investment and Economic Growth in Nigeria: A Revisit

This study examined the impact of foreign direct investment (FDI) on economic growth in Nigeria from 1981 to 2022. Real gross domestic product growth rate (RGDPGR) was the proxy for economic growth while foreign direct investment (FDI), gross fixed capital formation (GFCF), per capita income (PCI) and exchange rate (EXR) were the explanatory variables. The study employed the autoregressive distributed lag (ARDL) technique to estimate the model, while the eclectic paradigm and endogenous growth theory served as the theoretical framework for the study. The results revealed that in the long run, foreign direct investment, per capita income and exchange rate were positive but statistically insignificant to economic growth in Nigeria, while gross fixed capital formation was insignificant. However, in the short, GFCF had significant negative impact on economic growth in the second lagged year showing that a unit increase in GFCF decreased RGDPGR by approximately 10.21% while per capita income impacted positively on the growth of the Nigerian economy. Consequently, the study recommended that as a signal of market size for the inflow of FDI and particularly as a signal of human capital development, the government should increase her investment in human capital development focusing on technical skills relevant in manufacturing and service sectors to engender growth in per capita income to attract FDI and economic growth in Nigeria.

Foreign direct investment from Japan, South Korea and China in the Czech Republic: A comparative analysis

Multinational companies from Japan, South Korea and China began to actively penetrate Czech market starting from the mid-1990s. By 2021, Japan was the leader in terms of foreign direct investment stock in the Czech Republic ($ 4.7 billion), followed by South Korea ($ 3.4 billion); and China ($ 760 million). The methodological basis of the paper is Dunning’s eclectic paradigm, which makes it possible to explain foreign investment activities from the point of view of the simultaneous availability in these processes of ownership, location and internalization advantages. As a result of a comparative analysis, the author comes to the following conclusions. In the processes of activity of foreign affiliates of Asian companies in the Czech Republic (as part of the implementation of existing ownership advantages), the following features were identified: concentration on the main field of activity of the parent company; concentration of activity in those industries that are most developed in the Czech Republic (industry agglomeration effect); clustering of affiliates around the leading company and main activity; diversification of the activities of foreign affiliates by supplementing the main activities of the parent company with the activities in related sectors. To explain the weak presence of Chinese MNCs in the Czech market and the more deep activity of South Korean and Japanese MNCs, a “wedge-shaped” foreign market entry was proposed; it is based on the idea of internalization advantages of. The leading company represents a spearhead of the “wedge-shaped” foreign market entry. A large MNC possesses powerful and well-developed ownership advantages. It is the first to enter foreign market in the sector that is main one for its activity in the national market; and it is followed by foreign affiliates operating in the main and related sectors in a kind of expanding “wedge”. It is the penetration that enables MNCs to gain a foothold in the market, leveraging both ownership, location and internalization advantages.

Direct Investment of China in the Russian Automotive Sector as Part of the Global Strategy of Chinese Automakers

This article reveals the main trends of direct investments by China in the Russian automotive industry within the context of the global strategy pursued by Chinese auto manufacturers. Through an examination of the motivations behind Chinese automakers entering into foreign markets, using the eclectic paradigm of J. Dunning, the authors draw conclusions about the prospects of Russian-Chinese cooperation in the automotive sector. It is posited that the success of Chinese automotive corporations in the global arena is primarily linked to their ongoing exploitation of advantages generated in the domestic market, which are also extended outward through foreign investments. The main investment motivations identified for Chinese automakers include market access, technology transfer, cost reduction and global expansion. The authors highlight market access and global expansion as the principal drivers of Chinese direct investments in Russia. The challenges that Russian automotive industry faced recently will not allow fully leverage the benefits of cooperation with Chinese automakers in the short term. However, substantial impact of the cooperation with Chinese partners is expected to be the deeper localization of production in Russia.

Strategies of Multinational Corporations in Emerging Markets in Indonesia

Purpose: The aim of the study was to examine the strategies of multinational corporations in emerging markets in Indonesia
 Methodology: The study adopted a desktop methodology. Desk research refers to secondary data or that which can be collected without fieldwork. Desk research is basically involved in collecting data from existing resources hence it is often considered a low cost technique as compared to field research, as the main cost is involved in executive’s time, telephone charges and directories. Thus, the study relied on already published studies, reports and statistics. This secondary data was easily accessed through the online journals and library
 Findings: Multinational corporations (MNCs) in Indonesia's emerging markets exhibit a preference for collaborative entry strategies, emphasizing joint ventures and strategic alliances. These approaches enable MNCs to harness local expertise and navigate the complexities of the Indonesian market effectively. Government policies play a pivotal role in shaping MNC strategies, with favorable policies attracting greater foreign investment and expansion. Industry-specific competitive strategies, including price competition, technology differentiation, and product innovation, are tailored to meet local market demands. Additionally, MNCs actively engage with the
 Unique Contribution to Theory, Practice and Policy: Eclectic paradigm (OLI Framework), Resource-based view (RBV) & Institutional theory may be used to anchor future studies on the examining the strategies of multinational corporations in emerging markets in Indonesia. Encourages MNCs to build meaningful partnerships, leveraging local expertise and networks, which can be crucial for navigating complex regulatory environments and market dynamics. Engaging in policy advocacy represents a proactive approach by MNCs to shape the regulatory landscape in their favor while contributing to the host country's economic development.

Governance, Investors Motivations and Foreign Direct Investment Inflow in Selected African Countries: Does John Dunning’s Eclectic Paradigm Matters?

Abstract Over the years, studies have focused on the implications of institutional quality as a key factor of FDI inflows into Africa and how it influences the economic processes of various African countries. However, in the studies on Africa, investors’ motivations as determinants of foreign direct investment inflows into African regions are grossly understudied and yet determined. As a result, there is a need to investigate the impact of FDI inflows on African countries, as well as the implications of home and host country investment phenomena. The study employs ex-post-facto research using panel data obtained from different World Bank publications; world development indicators, and the Transparency Index database from 1997 to 2022. The System Generalized Method of Moments (SGMM) was used to examine the data. The results reveal that governance and investor motivations have a negative impact on each other; the effect of the interacted variables is less than the total of the impacts of governance and investor motivations separately. Therefore, FDI in the selecte3d African countries will decline by 7.5 points for every unit increase in the level of poor governance and investor motivations, and this validates the locational assumption of John Dunning Eclectic Paradigm with the proposition that FDI inflows is a function of the home and host investment phenomena As a result, we recommend that African governments implement Regulatory reform, market reform, complete streets policies, and contingency-based planning that are FDI inflow induced.

Debunking the Production Predicaments among the Motor and Pump Exporters in the Coimbatore Region: Upside-down Approach of O-L-I Framework

We explore the unplumbed dimension of the O-L-I specific advantage of the firm in this research by shifting the focus from the entry mode of MNEs to problems faced by home-based manufacturer exporters, which is unique from its original concept. The proposed approach transposes the idea and implication of the eclectic paradigm in an international trade setting. To test the upside-down approach of the O-L-I framework, various challenges were identified through EFA and CFA, and in the final phase, the impact of ownership, location and internalization has been measured (using path analysis) on production problems faced by these manufacturer exporters. We used a structured questionnaire to collect the data from 220 motors and pump manufacturer exporters from January to September 2021. Moreover, the Coimbatore city wears the crown of ‘Pump City of Asia’, which makes the spot an ideal place for generalization of research and optimization of desired results. The research outcome illustrates the significant impact of location and internalization on the production problems encountered by the manufacturer exporters. The novelty of the study is substantiated by extending the application of O-L-I specific advantage for FDI to home-based exports, which we labelled as the ‘up-side-down approach’ of the O-L-I framework.

Theoretical and methodological fundamentals of studying franchising

Methods. The study is based on the application of the monographic method for the study of clusters and the identification of cause-and-effect relationships of their development in the study of franchising. General scientific methods are also applied, in particular: abstractions – to determine the essence of the concept of «franchising»; grouping – to substantiate the theories that form a special theoretical platform for franchising research as a model of business organization; comparative analysis – when establishing quantitative and qualitative differences in the process of highlighting research clusters in the historiography of franchising. Results. Research clusters in the historiography of franchising were analyzed, which made it possible to form a theoretical platform for its study, which includes a system of theories regarding development prerequisites (globalization, competition, «push-pull» factors, entrepreneurship, network structures) and features of franchising. It is proposed to divide the theories that substantiate the specifics of franchising into two groups according to the criterion of their reflection: attraction and use of resources (theories regarding relations (agency, signals, institutional, stakeholders), as well as decision-making (transaction costs, eclectic paradigm, entrepreneurial orientation). It was determined that the most widespread is the theory of agency, which explains the regularities of relations and the weakening of the parties’ disagreements, when one executing entity represents the relations of another customer through the delegation of powers in decision-making, execution of operations, financial planning, investment portfolio management, etc. Considering the basis of relationships in the emergence of franchising and their importance for business success, the importance of the provisions of the concept of trust is updated. It is demonstrated that it continues to develop in the system of theoretical provisions on partnership in franchising, taking into account the new challenges of global instability, which have increased after the Covid-19 pandemic, the full-scale Russian invasion of Ukraine and the exacerbation of other international conflicts. Novelty. Based on the analysis of the historiography of franchising and the identification of the most common theories, there is proposed the classification of the theoretical fundamentals of studying franchising by groups that determine the prerequisites for its development, relations, decision-making, attraction and use of resources. Practical value. The conducted research can deepen the interdisciplinary approach and adapt the developed franchising methodology to Ukrainian characteristics, which will allow analyzing the development of franchising in Ukraine through the prism of theoretical justifications of its formation in international practice.

The Chinese outward foreign direct investment motives in ASEAN countries through export performance: The role of competitive intensity among Chinese smartphone manufacturers

AbstractThis study aims to examine the impact of outward foreign direct investment (OFDI) objectives on the achievement of export performance under competitive intensity. We apply the diverse theoretical perspectives of the eclectic paradigm and institutional theory. Primary data were collected from 162 Chinese manufacturer–exporter companies. Specifically, this research shows that Chinese OFDI motives increase its export performance in ASEAN markets. Furthermore, we discover that competitive intensity moderates the relationship between strategic assets‐seeking foreign direct investment (FDI) motive and export performance, but not the relationship between market‐seeking FDI motive and export performance. Hence, this study presents a holistic assessment of Chinese smartphone manufacturers' export performance by accounting for the overlooked effect of firms seeking FDI motive through the moderating of competitive intensity.

Comprando sua entrada: a estratégia de internacionalização do maior clube de futebol do Brasil

Abstract Currently, most successful football clubs are global brands, but mostly from developed regions. This teaching case concerns an emerging market football club wanting to become a global brand. Flamengo, a Brazilian football club with a long history and tradition in football, not to mention a large fanbase, was one of the powerhouses of Brazilian football and felt ready to take the next step. But how could they become a global brand when they are not part of a major global league? How and where should they begin? With these discussion questions as background, students will learn about two important internationalization theories: the Eclectic Paradigm and the Network Approach.

THE IMPACT OF FOREIGN DIRECT INVESTMENT ON FINANCIAL DEEPENING IN NIGERIA

The quest for economic growth and development has been the primary focus of economies worldwide, leading to the formulation of various policies and strategies. Foreign Direct Investment (FDI) is one such strategy, serving as a means to earn foreign reserves and finance capital formation, technology transfer, and trade. Nigeria has consistently been a top beneficiary of significant FDI in sub-Saharan Africa, with FDI inflows fluctuating over time. Despite the benefits of FDI, its impact on financial deepening and economic growth varies across countries and depends on factors such as absorptive capacity and the type of FDI. This study aims to examine the impact of FDI on financial deepening in Nigeria from 1980 to 2022. The research questions address the trend of FDI and financial deepening in Nigeria and the relationship between the two variables. The study will use theoretical frameworks, including the MacDougall-Kemp hypothesis and Dunning's eclectic paradigm, to explore the role of FDI in promoting financial deepening. The findings of this research could have significant implications for policymakers, the Nigerian government, investors, and businesses. Understanding the impact of FDI on financial deepening will help inform appropriate policy measures and strategies to enhance Nigeria's financial sector and spur economic growth. Additionally, the study contributes to the existing literature on FDI and financial deepening, providing valuable insights for future research in this area.

Internationalization of UD Aida Furniture MSMEs in Pasuruan East Java Indonesia: Its Process and Development

Destination from study this is for knowing process and development internationalization of MSMEs carried out by UD AIDA Furniture in the Regency Pasuruan, East Java, Indonesia .This research is an exploratory research where the approach is used is a qualitative approach. Qualitative researchers seek to understand experiences in life context and meaning associated with experience with use Focus Group Discussion with. Data collection techniques by conducting open ended interviews with the hope of obtaining more complete information from these respondents. Data analysis used descriptive analysis method. The results of the study show that the internationalization process for UD AIDA Furniture SMEs is appropriate with Upsala models with method gradually that is through a network of friends with the sales process through the domestic market, then next experience development To do export to abroad which includes United States of America and so on in development export to Taiwan, and Singapore. Besides that's also appropriate Resource based models as well as eclectic paradigm that internationalization carried out by UD Aida Furniture MSMEs because have superiority competitive.