Kiyoshi Kojima’s criticism of the eclectic paradigm (Kojima, 1982). he seems to assume that the internalisation and eclectic paradigms are trying to explain the same phenomenon. They are not. As far as I am aware, no one from the internalisation school has sought to explain the changing propensity of countries to invest, or be invested in, over time.
Kojima would be interested in answering the question, `Why does one country export certain types of goods and import other kinds of goods?’, whereas I would be concerned with explaining whether a particular country was a net importer or exporter of particular types of goods or of all goods. And, I admit that, at a macro level, the latter is a somewhat meaningless question, as in the last resort, and over a sufficiently long period of time, the balance of payments must balance. But, this is not the case with the stocks and flows of international investment. Moreover, most investment owned and controlled by MNEs is a different phenomenon from foreign portfolio investment (but see section 4.4 of this article). So, indeed, is trade conducted within MNEs different from trade between independent parties. In other words, as I have elaborated on elsewhere (Dunning, 1993a), organisational issues do inject the need for a set of analytical tools different from those offered by traditional trade theory