1. FDI AND MULTINATIONAL CORPORATIONS: WHY?
Motives for FDI and MNCs
Literature: Dunning, chapter 3-6;
Caves, chapter 1-2

2. TERMINOLOGY Direct investment - Portfolio investment
Greenfields - Acquisitions
Resource seekers - Market seekers - Efficiency seekers - Strategic Asset seekers
Vertical - Horizontal

3. Explanations for FDI and MNCs
Foreign Direct Investment
market disequilibrium
distortions imposed by governments
market structure imperfections
Multinational corporations
market failures and market imperfections
internalization
diversification
eclectic explanation: the OIL framework

4. FDI and market disequilibrium
Differential rates of return
Valuation of currencies / currency areas
Labor cost differentials
Technology differentials
Portfolio diversification
Main problem: FDI should disappear once equilibrium occurs

5. FDI and government imposed distortions
Trade barriers
Tax rules
Investment incentives

6. FDI and market structure imperfections
Hymer (1960) and industrial organization approach
Oligopolistic reaction
Product cycles

7. MNCs, market failures and market imperfections
external effects and spillovers
scale economies
transactions costs

8. MNCs and internalization
generalization of transactions cost approach
various firm activities are interdependent and related through flows of intermediate products
when transactions costs in arms-length markets are high, MNCs emerge

9. MNCs and OIL-framework
Dunning (1977, 1979, 1989, 1993) argues that three types of arguments for FDI must be present before MNCs emerge:
Ownership
Internalization
Localization
More check-list than theory.

10. WHY SO MANY THEORIES? new explanations needed when old ones fail
many different types of FDI
researchers come from different fields of economics
MNCs do not behave the same way in different environments