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Other Papers on :Capital Flows and FDI

S/E/62. Reasons why firms engage in FDI, and the various FDI theories

(2005, 2300 words)

This paper looks at FDI and argues why firms go to the trouble of setting up abroad when there are suitable resources already available to them in their home countries. It looks at the various theories behind FDI, including Capital Arbitrage Theory; Vernon Product Life Cycle; Monopolistic Theory; Internalisation Theory; Location Theory; and Eclectic theory, and then goes on to conclude.
 
   
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