Editing Internationalization (section)

=== Eclectic paradigm <small>''(John H. Dunning)''</small> ===
{{Main|Eclectic paradigm|John H. Dunning}}
The eclectic paradigm is a theory in economics and is also known as the OLI-Model.<ref name="hagen">{{cite book |title= Deutsche Direktinvestitionen in Grossbritannien, 1871–1918 |last= Hagen |first= Antje |year= 1997 |publisher= Franz Steiner Verlag |location= Jena |isbn= 3-515-07152-0 |page= 32 |url= https://books.google.com/books?id=BqjhLmKdj0AC |format= Dissertation |language= de }}</ref><ref name="twomey">{{cite book |title= A Century of Foreign Investment in the Third World |last= Twomey|first= Michael J. |year= 2000 |publisher= Routledge |isbn= 0-415-23360-7 |page= 8 |url= https://books.google.com/books?id=2uZFPyqHMGcC |format= Book}}</ref> It is a further development of the theory of internalization and published by [[John H. Dunning]] in 1993.<ref name="falkenhahn">{{cite web |url= http://www.uni-weimar.de/medien/management/sites/ws0102/int_man/int_man_content/eklektisches_paradigma_falkenhahn_stanslowski.pdf |title= Das Eklektische Paradigma des John Dunning |access-date= 2009-02-19 |last= Falkenhahn |first= Alexander |author2= Roman Stanslowski |date= 2001-11-27 |work= Seminar paper |language= de }}{{dead link|date=November 2017 |bot=InternetArchiveBot |fix-attempted=yes }}</ref> The theory of internalization itself is based on the [[Transaction cost|transaction cost theory]].<ref name="falkenhahn" /> This theory says that transactions are made within an institution if the transaction costs on the free market are higher than the internal costs. This process is called ''internalization''.<ref name="falkenhahn" />

For Dunning, not only the structure of organization is important.<ref name="falkenhahn" /> He added three additional factors to the theory:<ref name="falkenhahn" />

* Ownership advantages<ref name="hagen" /> (trademark, production technique, entrepreneurial skills, returns to scale)<ref name="twomey" />
* Locational advantages (existence of raw materials, low wages, special taxes or tariffs)<ref name="twomey" />
* Internalisation advantages (advantages by producing through a partnership arrangement such as licensing or a joint venture)<ref name="twomey" />