Content area
Full Text
Abstract:
John Dunning introduced the OLI (Ownership-Location-Internalization) paradigm 37 years ago to explain the origin, level, pattern, and growth of MNEs' offshore activities. Over the years, OLI has developed into perhaps the dominant paradigm in international business (IB) studies. However, the costs of being a paradigm are reflected in Dunning's efforts to include an ever-expanding array of IB theories and phenomena under the OLP "big tent." In this paper, we focus specifically on the O in the OLI paradigm, tracing the history of Dunning's ownership advantages. We argue that the modifications of O advantages over four decades, as Dunning attempted to bring all IB phenomena and IB-related theories under the OLI "big tent," has had mixed results. However, we continue to believe that the typology of ownership advantages retains its relevance for IB scholars; that O advantages cannot and should not be subsumed within internalization advantages; and that O advantages are necessary for explaining the existence and success of the MNE as an organizational form.
Keywords: OLI paradigm, eclectic paradigm, John Dunning, ownership advantages, internalization theory.
INTRODUCTION
The OLI or eclectic paradigm was developed by John H. Dunning over more than 35 years of thinking and writing about the multinational enterprise (MNE). His views changed over the years in response to changes in the global economy, as well as to criticisms from other IB scholars. In particular, Dunning continued to have a long-running debate with internalization scholars (e.g., Peter Buckley, Mark Casson, Alan Rugman) as to whether the OLI paradigm or internalization theory should be seen as "the" core theory of international business. That debate continues today (see Rugman in this volume).1 Over the years, in Dunning's work, OLI morphed from a theory to a paradigm and grew broader as Dunning continued to include more and more phenomena under the OLI"big tent."
In this paper, we trace the history of Dunning's views of the O in OLI. We argue that Dunning, because he saw the OLI as a paradigm, was forced to continually revise his framework so as to include an ever larger and more diverse array of factors that could (and did) influence MNE activity. As a result, the O advantages (and the same is likely true for I and L advantages;...