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Liburkina L. M.

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The Evolution of Financial System Elements in Foreign Direct Investment Theory: From the Firm-Centered Paradigm to the Eclectic Synthesis
Maslii V. V.

Maslii, Vadym V. (2026) “The Evolution of Financial System Elements in Foreign Direct Investment Theory: From the Firm-Centered Paradigm to the Eclectic Synthesis.” Business Inform 7:488–497.
https://doi.org/10.32983/2222-4459-2026-7-488-497

Section: Finance, Money Circulation and Credit

Article is written in Ukrainian
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UDC 336.01:339.727.22

Abstract:
The development of modern theories of foreign direct investment (FDI) has been accompanied by a gradual expansion of the list of determinants of international investing, yet the role of the host country’s financial system remained underconceptualized for a long time. This highlights the need to rethink classical firm-centric FDI theories through the lens of modern financial science. The aim of the study is to identify the specific features of the evolution of scientific ideas regarding the role of individual elements of the financial system in firm-centric FDI conceptions and John Dunning’s eclectic paradigm. The research is based on a historical-theoretical analysis of the development of major international investment conceptions from the second half of the 20th to the early 21st century, using a system approach to interpreting financial factors. The methodological basis includes the historical-logical method, content analysis of scientific works, comparative analysis, and the method of theoretical generalization. In the course of the study, the evolution of firm-centric FDI theories was systematized, the transformation of the role of financial factors in the works of S. Hymer, C. Kindleberger, R. Vernon, J. Dunning, and S. Lundan was described, patterns in the gradual expansion of the financial determinants of international investment were identified, and an original explanation was formulated for the lack of conceptual understanding of the financial system of the host country in classical FDI theories. It was found that the integration of individual financial elements into FDI theories historically preceded their understanding as an interconnected financial system. The study shows that the evolution of the eclectic paradigm laid the theoretical groundwork for a subsequent move towards an institutional understanding of the financial environment in international investment. The theoretical value of the study lies in deepening scientific understanding of the development of firm-centric FDI conceptions and clarifying the role of the financial system within the structure of their determinants. The practical significance of the results obtained is in their potential use when developing modern theoretical models of interaction between the financial system and the process of foreign direct investment. The scientific novelty lies in the historical-theoretical rethinking of classical FDI theories from the perspective of modern financial system theory. Prospects for further research are associated with analyzing the post-eclectic stage of FDI theory development and forming the conception of a host country’s financial system as an independent factor in international investing.

Keywords: foreign direct investment; financial system; firm-centric paradigm; eclectic paradigm; financial determinants; locational advantages; FDI theory.

Bibl.: 38.

Maslii Vadym V. – Candidate of Sciences (Economics), Associate Professor, Associate Professor, Department of Applied Mathematics, West Ukrainian National University (11 Lvivska Str., Ternopil, 46009, Ukraine)
Email: [email protected]

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