1. Throughout this chapter, FDI stocks or flows are used as proxies for the value added activities of firms which own or control such activities outside their national boundaries (i.e. MNEs). Though an imperfect measure of these activities, the FDI data, published by all the major countries in the world, are broadly comparable. This is not the case with other data, sales, net output or employment.
2. 1996 is the latest year for which detailed data on FDI stock and flows are available at the time of writing. These do not fully take into account the effects of the East Asian crisis nor the problems of the Russian economy. However, preliminary data for 1997 suggest that FDI inflows to South East and South Asia were 6.2% higher than those for 1996, which in turn were 16.6% above those for 1995. By contrast, foreign portfolio capital inflows dropped dramatically; indeed there was a net exodus of capital from the region in 1997. FDI outflows from the region in 1997 were also about marginally higher than those in 1996 ($50.2 billion cf. $47.4 billion). Rather surprisingly, FDI inflows into the Russian Federation more than doubled from $2.5 billion to $6.2 billion in 1997: UNCTAD, World Investment Report1998 (Geneva: United Nations, 1998).
3. The OLI configuration, explaining the extent and pattern of the foreign value-added activities was first put forward by the author in the mid-1970s. For a recent exposition of the eclectic paradigm of international production. See John H. Dunning, ‘Reappraising the Eclectic Paradigm in the Age of Alliance Capitalism’, journal of International Business Studies 26:3 (1995) 461— 91; John H. Dunning, The Eclectic Paradigm as an Envelope for Economic and Strategic Theories of MNE Activity (Newark, US and Reading, UK: mimeo, 1999).
4. Of course, there are other modalities than FDI in promoting the cross-border mobility of goods, services and assets. Indeed, it is likely — though this is very difficult to quantify- that non-equity strategic alliances and networking have become increasingly important vehicles for the transfer of assets, particularly intangible assets, over the past two decades. See particularly, in this connection, the work of John Hagedoorn and his colleagues at MERIT and the University of Limburg.
5. Dunning, ‘Reappraising the eclectic paradigm’ and The Eclectic Paradigm.