176 J.H.Dunning/International Business Review 9 000)163-190 uo paseq saisn ddns SVS pouauo ddns SH( SW( zIs's1q :0861:9861 uouzneD qWW :661'1661 $661 'po)siso (S661 2 :966 9176 J.H. Dunning / International Business Review 9 (2000) 163–190 Table 3 Theories explaining L specific advantages of countries 1) MS 2) RS 3) ES 4) SAS 1. Traditional location theories. •Demand related •Supply oriented •Supply oriented •Location and price of created assets, (Hoover, 1948; Hotelling, 1929; Isard, variables, e.g. size, variables, e.g. variables, especially including those owned by firms likely 1956; Losch, 1954; Lloyd & Dicken, character and potential availability, quality those related to to be acquired 1990; Weber, 1929) growth of local and and price of natural comparative adjacent markets resources, advantages of transportation costs, immobile assets, e.g. artificial barriers to labor, land and trade infrastructure •Presence of •Exchange rates competitors 2. Theories related to the process of •Mainly MS and RS, using traditional •Some attention given to foli as a internationalization. (Anderson & locational variables, but also several firm learning activity Gatignon, 1986; Cavusgil, 1980; specific variables and transaction costs Daniels, 1971; Forsgren, 1989; Hirsch, 1976; Johanson & Vahlne 1977, 1990; Luostarinen, 1979; Vernon, 1966; •Emphasis on role of psychic distance, Welch & Luostarinen, 1988) particularly in exploiting accumulated knowledge based O advantages (Daniels, 1971; Johanson & Vahlne 1977, 1990) 3. Agglomeration theories. (Audretsch, •Some clustering of •Supply related clusters, based on static •Supply related clusters based on asset 1998; Enright 1991, 1998; Forsgren, products for external economies, e.g. pooled labor markets augmenting activities, local 1989; Krugman 1991, 1993; Malmberg convenience of accumulation of knowledge, and et al., 1996; Porter 1994, 1996; Storper, consumers, including exchange of information and learning 1995; Cantwell & Piscitello, 1997) industrial consumers experiences •Economies of scale •Economies of scale and scope and scope 4. Theories related to spatially specific •Given production and transport costs, external ties and scale economies, spatially related transaction costs are transaction costs. (Florida, 1995; Scott, hypothesized to lead to a clustering of related activities. (a) to reduce overall costs and (b) to maximize benefits 1996; Storper & Scott, 1995) of inter-related innovating and learning activities (continued on next page)