Lecture 2:

Question 1

An OLI synthesis

Choose FDI when three conditions exist:

Answer 1

(O) possesses ownership advantages: owns a valuable asset to provide an international competitive advantage eg technology, trademark, political connections

(L) location advantages: specific to the location where the O advantages can be complemented, created, acquired or exploited

(I) internalisation advantages: high transaction costs of control - internalise and control its O advantages.