 From a Theory to a Paradigm: Examining the Eclectic Paradigm as a Framework in International EconomicsPaz Estrella Tolentino International Journal of the Economics of Business, 2001, vol. 8, issue 2, 191-209 Abstract: Over the course of a quarter of a century, the eclectic paradigm has derived its strength from being a general framework of analysis that explains the level and pattern of foreign value-added activities of firms, and/or of countries, and allows for the co-existence of complementary and alternative theories in the discipline of international economics in a logically consistent manner without being inextricably wedded to any one particular approach. The current study aims to support such broad theoretical appeal of the paradigm by refining its theoretical interpretations of the concepts of ownership advantages and internalisation. To support its view that asset ownership advantages are both competitive advantages and monopolistic advantages, the theoretical interpretation of asset ownership advantages in the paradigm needs to be broadened from a narrow emphasis on Bain-type monopolistic advantages which enable firms to erect barriers to entry to new competition and exercise monopoly power in final product markets. It must also accommodate the theoretical perception of asset ownership advantages as part of the rivalrous behaviour or competitive process between firms consistent with the approach of Cantillon and the classical economists starting with Adam Smith, the Austrian economists such as Schumpeter and Hayek, as well as Penrose. The eclectic paradigm must also effectively address the important distinction between 'internalisation of ownership advantages or intermediate products' and the 'internalisation of the markets for ownership advantages or intermediate products' within the context of endogenous structural market imperfections in final products and exogenous transactional market imperfections in intermediate products. In clearly distinguishing between the alternative interpretations of the concepts of ownership advantages and internalisation, the paradigm could more effectively synthesise alternative theories of the firm and the multinational corporation in one cogent framework of economic analysis. Keywords: Eclectic Paradigm; Theory Of International Production; Theory Of The Multinational Enterprise (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:ijecbs:v:8:y:2001:i:2:p:191-209 Ordering information: This journal article can be ordered from DOI: 10.1080/13571510110051496 Access Statistics for this article International Journal of the Economics of Business is currently edited by Eleanor Morgan More articles in International Journal of the Economics of Business from Taylor & Francis Journals |
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