OLI Framework

The OLI Framework, developed by economist John Dunning, explains why companies choose to expand abroad. It stands for Ownership, Location, and Internalization advantages. Ownership advantages are unique resources or capabilities, like brand or technology, that give a company an edge. Location advantages refer to the specific benefits of a foreign market, such as cheaper resources or better access to customers. Internalization advantages involve the benefits of managing operations within the company rather than outsourcing, like protecting technology or maintaining quality. Together, these factors help a firm decide whether to invest overseas and how to organize its international activities efficiently.