TAILIEUCHUNG - Introduction to the Theoretical Framework of Dunning’s Investment Development Path

This article briefly collects and introduces some theoretical aspects of Dunning’s IDP model aiming at providing a theoretical framework for further research on FDI. | VNU Journal of Science: Education Research, Vol. 32, No. 5E (2016) 1-11 Introduction to the Theoretical Framework of Dunning’s Investment Development Path Nguyen Thi Kim Anh*, Le Hong Ngoc VNU University of Economics and Business, 144 Xuan Thuy Str., Cau Giay Dist., Hanoi, Vietnam Received 22 November 2016 Revised 30 December 2016, Accepted 22 December 2016 Abstract: Proposed in 1981 by John H. Dunning, the investment development path (known as the IDP model) has been considered to be an application of the eclectic paradigm. It is an expansion of Dunning’s terms on internationalizing activities of TNCs at a macro level in order to explain a country’s FDI patterns. The nature of the IDP model is a dynamic approach which examines the systematic relationship between a country’s net position of foreign direct investment (both inward and outward FDI) and its different stages of development. Recently, numerous authors around the world have conducted research about the development of investment using the IDP model for countries and/or groups of countries that have been effective in terms of policy implications. This article briefly collects and introduces some theoretical aspects of Dunning’s IDP model aiming at providing a theoretical framework for further research on FDI. Keywords: Eclectic paradigm (OLI paradigm), Investment Development Path (IDP), John H. Dunning. 1. Introduction * macroeconomic approach studies from a nations’ outlook. Among all, Dunning’s eclectic paradigm is considered to be a common framework for analysis of TNCs’ international business [1]. One of its applications is the investment development path (IDP), which generalizes the international investment development process and the changes in the international investment position of a country. This article reviews existing papers applying the IDP model in order to develop a theoretical framework for further research on countries’ FDI patterns. After an overview of the OLI (eclectic) paradigm and

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