Does Dunning's OLI model really explain the pattern of foreign direct investments by emerging market multinationals (EMMs)? I argue that it suffers from the basic flaw of assuming that location advantages (CSAs) are properties of a country and freely available to all firms operating there. But some CSAs have owners, usually local firms, who can sometimes derive significant gains from the monopoly control of these resources. They can use this monopoly power to finance intangible‐seeking investments in developed countries to obtain the firm‐specific advantages (FSAs) they lack and, hence. compete with FSA‐rich MNEs in their own market, and then internationally.
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