ABSTRACT
In this chapter, we shall identify, and suggest reasons for, the changing geography of foreign direct investment (FDI) by multinational enterprises (MNEs)1 between 1975-1980 and 1990-1996.2 In pursuing this task, we shall consider the main changes which have occurred in the global economy over the past two decades, and in particular, how these have affected: (i) the competitive or ownership specific (O) advantages of firms; (ii) the competitive or location specific (L) advantages of countries; and (iii) the modalities by which firms coordinate their mobile O specific advantages with the immobile L specific advantages of countries (i.e. whether firms choose to buy or sell assets, or rights to assets through intermediate product markets and/or network relationships, or whether they prefer to internalize (I) the market for these assets or rights).3
