the location of economic activity by MNEs, while the balance of costs and benefits
in owning or accessing resources and capabilities is affecting the way in which they
are organised.
In examining the implications of these two developments ± the one relating to
the innovation and deployment of new technological assets, and the other, that of
human assets ± I believe the eclectic paradigm provides a powerful analytical
framework. Within that framework it also offers up a number of new contextually
related hypotheses, as a result of which received theories of the firm and the location
of economic activity may need reappraisal.
5. Concluding Remarks: A Look Towards the Future Let me conclude by re-emphasising a number of points. The first is that, although
I have sometimes illustrated the eclectic paradigm by reference to the individual
firm, my main focus of interest is in explaining the international production of all
firms from a particular country or group of countries. Because of this, I contend
that it is inappropriate to compare the merits and demerits of the eclectic paradigm
with that of internalisation and other theories of the firm.
Second, I accept that some O-specific advantages are directly the result of firms
internalising the market for its intermediate products across national borders.
However, since this very act of internalisation puts the internalising firms at an
advantage relative to non-internalising firms, I think it appropriate to refer to this
benefit as an advantage and to internalisation as the modality by which this
advantage is realised.
Third, I acknowledge that the eclectic paradigm, as originally conceived is
uncomfortable in dealing with the dynamics of international production. However,
I would argue that it can help to explain why an industry’s or country’s international
investment profile may be different in two points of time. To link these two points, one needs to introduce changes in the exogenous or endogenous variables,
including strategy and how these in turn affect the OLI configuration. I have
illustrated from the IDP how this may be done at a macro level. At an industry or micro level, only a detailed examination of the profile of individual firms can resolve
this problem. The reclassification of firms into strategic groups (McGee and
Thomas, 1986) is helping to show us that the type of strategic behaviour is not an
idiosyncratic variable but can be related to certain characteristics of firms(or groups
of firms). Fourth, I have endeavoured to explain differences between my approach and
that of Kiyoshi Kojima, and I hope I have made it clear that this is primarily a difference in emphasis and perspective rather than of reasoning between us. Fifth, I have emphasised that as strategic asset-acquiring FDI and non-equity
alliances have become more important forms of international economic involvement,
so the OLI configuration of the eclectic paradigm requires some reappraisal.
In particular, I acknowledge that, without knowing whether a firm is contemplating
an FDI to exploit a competitive strength or to overcome or counteract a competitive
weakness, it is difficult to offer any prediction. Only by treating the cumulative
process of sustaining and advancing the core competences of firms (rather than a discrete and once-and-for-all transaction) can this conundrum be resolved. This
then suggests that in future, the eclectic paradigm might better address itself to
explaining the changing characteristics of international production than to its level
and composition at a particular moment of time.