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According to the theory this company can maintain
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jenniferfelix

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MessaggioInviato: Lun Giu 24, 09:51:56    Oggetto:  According to the theory this company can maintain
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The OLI paradigm states that
a company first need 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 a foreign market.

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

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

According to the theory the corporation can maintain its ambitious advantage if it fully controls the entire value chain in it is industry. The fully possessed MNC minimizes agency prices resulted from asymmetric
information, deficit of trust, monitoring partners, suppliers and finance institutions.

Self financing eliminates overseeing of debt contracts on foreign subsidiaries which might be financed locally or by means of joint ventures. If a company has a low global cost and high quantity of capital why share it with
joint ventures, providers, distributers, licensees, or area banks that probably include higher cost of money.
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MessaggioInviato: Lun Giu 24, 09:51:56    Oggetto: Adv



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