Multinational enterprise competition: grounding the eclectic paradigm of foreign production in resource‐advantage theory

This paper seeks to explicate a dynamic theory of competition, i.e. the resource‐advantage theory of competition, with the aim of developing a theoretical foundation for the eclectic paradigm of foreign production.

The paper is conceptual in approach.

The paper develops a set of five criteria that should be met by any theory that attempts to ground the eclectic paradigm. In addition, it demonstrates that the resource‐advantage theory of competition meets all of these criteria.

By providing a theoretical foundation for the eclectic paradigm of foreign production, the paper provides researchers with a broader perspective from which to investigate multinational enterprise competition.

The usefulness of frameworks, such as the eclectic paradigm of foreign production, is limited when they are not grounded in positive theories. By grounding the eclectic paradigm of foreign production, this paper enhances the paradigm's usefulness.