An Introduction to the Eclectic Paradigm as a Meta-Framework for the Cross-Disciplinary Analysis of International Business

Abstract

Originally the eclectic paradigm helped bring together and compare mainly economic theories of International Business (IB). However, today it’s greater value is as an integrating framework that can enable us to relate to one another the full range of IB theories that have been derived from ideas constructed at different levels of analysis, and taken from different disciplines. This paper restates the key elements of the eclectic paradigm and explains how they have been successfully adapted to reflect changes in the real world of international business activities. It is argued that the eclectic paradigm is best interpreted as an evolutionary framework that captures changes in the application of the three key constructs of ownership (O), location (L) and internalization (I) advantages as IB activities have evolved historically. Our understanding of such high level encompassing concepts has become steadily richer and more complex over time, as IB activity itself has become more complex, and so too has the process by which IB interacts with the environment. This gradually rising complexity of the IB phenomenon calls for a synthetic appreciation of an ever wider variety of analytical approaches to the subject. My paper defends the eclectic paradigm and explains its continuing relevance in response to various recent criticisms. I show how the eclectic paradigm has always been a meta-framework for combining or comparing the full diversity of contributions to IB theory development, and how the need for such an overarching explanatory framework in the IB field has now become more vital than ever.

Keywords: Eclectic paradigm, OLI framework, international business theory

JEL Classification: B20, F23, F60, L14, L24, M16, N10, O19