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According to the theory the provider can maintain
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wandajackson

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PostPosted: 26 Jun 2019 05:38:20    Post subject:  According to the theory the provider can maintain
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This OLI paradigm states that
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a company first have to have "O"- owner specific competitive advantage from a home market that may be transferred into a foreign market. Then the company must be attracted by "L"- location specific characteristics of your foreign market.

These characteristics might include low priced of raw materials along with labor, a large home market, unique sources regarding raw materials, or state-of-the-art technological centers. Location is significant because the company
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have different FDI factors. By relying to location characteristics it may possibly pursue different FDIs. It may possibly implement either horizontal or perhaps vertical FDIs.

The horizontal FDI occurs each time a company locates a plant abroad in order to improve its market having access to foreign consumers. Vertical FDI, through contrast, is not mainly or necessarily aimed at selling in
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a foreign country nonetheless to cutting costs by making use of lower production costs generally there. The "I" stands for internalization.

According to the theory the business can maintain its aggressive advantage if it fully controls the entire value chain in it has the industry. The fully run MNC minimizes agency fees resulted from asymmetric
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information, deficit of trust, monitoring partners, suppliers and finance institutions.

Self financing eliminates following of debt contracts on foreign subsidiaries which might be financed locally or simply by joint ventures. If a company has a low world cost and high availability of capital why share it with
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joint ventures, providers, distributers, licensees, or area banks that probably own higher cost of capital.
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Adv



PostPosted: 26 Jun 2019 05:38:20    Post subject: Adv





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