Considering foreign direct investment in Denmark: The eclectic paradigm of Dunning revisited

Research output: ResearchWorking paper

Abstract

The present paper examines the aspect of relational assets and relates it to the strategic decision on undertaking foreign direct investment (FDI). The point of departure is the increasing importance of FDI globally as well as in the Danish economy, and the observation that even though Denmark actively participates in the international flow of FDI, both inwardly and outwardly, the Danish economy has only to a small extent been the target of Japanese efforts. Based on the gradual evolution of Dunning?s eclectic paradigm in the field of internationalisation theory, the paper argues that the creation of relational assets is an important part, and increasingly so, of strategic FDI decisions, and that the ensuing importance of social capital makes it economically efficient to focus on economies with favourable conditions for cooperation and networking. Since social capital favouring the creation of relational assets characterises the Danish economy, and since Japanese FDI operations tend to favour the establishment of long-term commitments and relationships, there is a potential for increasing the mutual FDI flows between Japan and Denmark.
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The present paper examines the aspect of relational assets and relates it to the strategic decision on undertaking foreign direct investment (FDI). The point of departure is the increasing importance of FDI globally as well as in the Danish economy, and the observation that even though Denmark actively participates in the international flow of FDI, both inwardly and outwardly, the Danish economy has only to a small extent been the target of Japanese efforts. Based on the gradual evolution of Dunning?s eclectic paradigm in the field of internationalisation theory, the paper argues that the creation of relational assets is an important part, and increasingly so, of strategic FDI decisions, and that the ensuing importance of social capital makes it economically efficient to focus on economies with favourable conditions for cooperation and networking. Since social capital favouring the creation of relational assets characterises the Danish economy, and since Japanese FDI operations tend to favour the establishment of long-term commitments and relationships, there is a potential for increasing the mutual FDI flows between Japan and Denmark.
Original languageEnglish
Number of pages13
StatePublished - 2005
Publication categoryResearch
Peer-reviewedNo

    Research areas

  • FDI, Relational assets, Internationalisation, eclectic paradigm

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ID: 166141