Rethinking the O in Dunning’s OLI/Eclectic Paradigm

Lorraine Eden (Professor of Management at Texas A&M University, Editor‐in‐Chief of the Journal of International Business Studies, and a Fellow of the Academy of International Business)
Li Dai (Doctoral student at the Mays Business School, Texas A&M University)

Multinational Business Review

ISSN: 1525-383X

Publication date: 17 June 2010


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 OLI “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 the past 37 years, 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



Eden, L. and Dai, L. (2010), "Rethinking the O in Dunning’s OLI/Eclectic Paradigm", Multinational Business Review, Vol. 18 No. 2, pp. 13-34.



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Copyright © 2010, Emerald Group Publishing Limited

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