2001 Fiscal Year Final Research Report Summary
An Extention of "OLI" frame work in the Theory of FDI and its Application
| Project/Area Number |
10630054
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
経済政策(含経済事情)
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| Research Institution | Keio University |
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Principal Investigator |
TAKEMORI Shumpei Keio University, Dept. of Economics, Professor, 経済学部, 教授 (30179676)
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| Co-Investigator(Kenkyū-buntansha) |
KIMURA Fukunari Keio University, Dept. of Economics, Professor, 経済学部, 教授 (90265918)
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| Project Period (FY) |
1998 – 2001
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| Keywords | OLI framework / Longditudinal Data / Foreign Direct Investment |
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| Research Abstract |
Theoretical Studies of Foreign Direct Investment (FDI) in the post war years have been dominated by the so-called "OLI paradigm". This paradigm postulates that FDI, that is a decision made by a multi-national firm of starting a business abroad, is a result of three dimensional decision : (1) whether or not a firm owns the advantage over the intangible asset so that it can withstand the competition, with foreign firms (O-dimension), (2) whether or not a foreign country as a product location has an advantage over the home country (L- dimension), and finally (3) whether or not internalizing that operation has an advantage over out-sourcing (I-dimension). The basis of the present study is, naturally, the numerous theoretical and empirical researches based on this paradigm. Yet it tried to go beyond that by proposing hypothesis that are not covered by the previous studies based on OLI. Furthermore, it supported the hypothesis by micro-data analysis of Japanese foreign direct investment. In particular, we used both the longitudinal and firm-based data to follow the evolution and the development of Japanese firms through their experiences of FDI. As the result of the studies we gained new perspectives on FDI. For instance, for many Japanese firms the decisions on location and internalization are not separate : They are interrelated questions to be solved simultaneously. Moreover, for many firms the experience of FDI itself is a learning process through which they acquire the intangible asset. We also presented hypothesis as well as the evidences concerning both portfolio international investments and FDI, thus contradicting OLI that postulates FDI as a phenomena distinct from portfolio international investments.
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