Reconciling internalization theory and the eclectic paradigm

The eclectic paradigm of Dunning (1980) (with its OLI and four motives for FDI framework) can be reconciled with the firm and country matrix of Rugman (1981). However, the fit is not perfect. The main reason for misalignment is that Dunning is focused upon outward FDI into host economies, whereas Rugman’s matrix is for firm-level strategy covering MNE activity in both home and host countries.

Does the regional nature of multinationals affect the multinationality and performance relationship?

The traditional independent variable in the multinationality and performance literature is the ratio of foreign (F) to total (T) sales, (F/T). This can now be supplemented by a new regional variable, the ratio of regional (R) to total (T) sales, i.e. (R/T). Data are presented on both (F/T) and (R/T) for both sales and assets for a 5-year period, 2001–2005. New tests are reported on (R/T) as it affects a financial measure of performance, the Tobin's Q. Implications are drawn for future research on the S-curve relationship between multinationality and performance in the light of this regional phenomenon.