CONTENT
1.Introduction 2
2. IB theories (IDP, ILO) and their invalidation for IB firms from NICs 2
2.1 IDP paradigm: 2
2.2 OLI theory 3
3. Globalization and IDP paradigm 4
4. Samsung’s role in the outpacing of IDP position of Korea 6
4.1 Development of technology capability 7
4.2 Crisis management creation and human resources management 7
4.3 R&D support and technology capabilities 8
4.4 Financial resources transferred within the group 8
5. Conclusions 9
References 11

1. Introduction

Since the early 1980s, the world economy has experienced rapid ‘globalization’. Globalization has changed the pattern of trade, foreign direct investment (FDI) in world economic activity. One remarkable change lies in the once widely used investment development path (IDP) paradigm. In many newly industrialized countries, MNEs have accelerated their internationalization, leading to an increase of outward FDI from those countries on a scale earlier than the IDP would suggest. This report introduces some IB theories such as OLI and IDP, and explains why these theories are more useful for describing the internationalization process of large established IB firms but less so for IB firms from newly industrialized countries. Also, the role of globalization in changing the predictions of IDP paradigm as well as how Samsung took a major role in enabling Korea to outpace its IDP position have been illustrated in this report.

2. IB theories (IDP, ILO) and their invalidation for IB firms from NICs

In this case, IB theories are essential for describing the internationalization process for established IB companies, while they are less valid for NICs IB companies. This part mainly introduced the two theories and the reasons why those IB companies from NICs do not follow the rule of the theories.

2.1 IDP paradigm:

In this paradigm, countries have a