The Challenge of Electronic Markets for International Business Theory

Abstract

We examine the extent to which the eclectic paradigm of international production, and its composite theories, can help explain the coming E-commerce revolution. Our findings are that the basic tenets of the paradigm appear to hold well, but the operational application of several of the constituent parts and the context in which they are being considered, need to be redefined in the light of some of the unique characteristics of Internet transport.E-COMMERCE, Ib Theory, Eclectic Paradigm,

Current Trends in the International Business Environment

“…This is a different approach of the firms competing in the current business environment as previously they had the focus of extending their ownership of these same resource and capabilities (43). b) The Internet makes the physical location less important for value activities of firms as it makes indistinct the corporate lines between firms and their competitors for any business activity (43). c) The Electronic Data Interchange (EDI) networks that used to lower transaction costs were affordable only to the large firms before the Internet was developed.…”

“…As a result of the development of the Internet and e-commerce, Dunning and Wymbs (43) questioned themselves as "to what extent can the Internet related IB activities be accommodated within the OLI framework of the paradigm" (43) and point to the significance of looking for modifications to the OLI paradigm. This is applicable to the ownership (O), location specific factors (L) and internalisation (I).…”

“…This theory is the outcome of an attempt to bring together the prevalent main economic and behavioral theories such as the resource-based view of the firm, evolutionary theory, organisational theory and economic strategic theory to explain FDI of MNEs (37,40,41,42). The theory explains that "the extent, pattern and form of IB activity will depend on the juxtaposed behaviour of three sets of advantages" (43).…”

“…Among these resources, knowing the significance of network relationships is of primary importance considering their role in value creation in firms. The network relationships are 'relational assets' which are considered as intangible assets to firms (22,43).…”

Ethics and Corporate Responsibility in International Relations

“…Even internationalisation theories have had to measure up to the increasingly complex state of affairs. International occurrences can no longer be explained in terms of different levels of allocation or of rapacious imperialism: Dunning's eclectic vision, which has evolved to the extent of embracing the most recent new economic trends, typifies the need to come to terms with this complexity (Dunning 1982 and2001). A robustly ideological vision of global phenomena has certainly lost no ground.…”