International Capital Movements

Part of the series International Economics Study Group pp 84-121

Explaining the International Direct Investment Position of Countries: Towards a Dynamic or Developmental Approach

  • John H. Dunning


This chapter explores the proposition that a country’s international direct investment position, and changes in that position, may be usefully explained by the eclectic theory of international production. Using data on the direct investment flows (or changes in the direct capital stock) of some 67 countries, over the period 1967–78, it also suggests that there is a systematic relationship between the determinants of those flows and the stage and structure of a country’s economic development.