The article discusses the implications of alliance capitalism for understanding the determinants of multinational enterprise (MNE) activity, particularly the eclectic or OLI paradigm. It argues that the increasing porosity of firm, country, and market boundaries necessitates a reevaluation of the OLI paradigm to consider competitive advantages arising from inter-firm transactions, interdependent markets, and the external economies of interdependent activities. The article traces the evolution of hierarchical capitalism, which was based on Fordism and hierarchical control, and contrasts it with alliance capitalism, which emphasizes cooperation and competition between firms. Alliance capitalism is characterized by a governance structure based on consensus and mutual trust, rather than hierarchical control. The article suggests that the eclectic paradigm needs to be reconfigured to incorporate the role of inter-firm relationships and transactions, particularly strategic alliances and networks, in shaping the competitive advantages of firms. It also highlights the importance of location-specific advantages, the spatial integration of economic activities, and the role of national and regional authorities in influencing localized centers of excellence. The article concludes that the shift from hierarchical to alliance capitalism reflects a broader change in the techno-economic system of production, favoring a 'voice' rather than an 'exit' response to market failure. The implications of this shift for the eclectic paradigm include a broader understanding of ownership-specific advantages, the role of inter-firm relationships in shaping these advantages, and the need to incorporate the effects of strategic alliances and networks into the theory of internalization. The article also emphasizes the importance of considering the specific characteristics of firms, including their production, innovation, and ownership strategies, in understanding the determinants of MNE activity.The article discusses the implications of alliance capitalism for understanding the determinants of multinational enterprise (MNE) activity, particularly the eclectic or OLI paradigm. It argues that the increasing porosity of firm, country, and market boundaries necessitates a reevaluation of the OLI paradigm to consider competitive advantages arising from inter-firm transactions, interdependent markets, and the external economies of interdependent activities. The article traces the evolution of hierarchical capitalism, which was based on Fordism and hierarchical control, and contrasts it with alliance capitalism, which emphasizes cooperation and competition between firms. Alliance capitalism is characterized by a governance structure based on consensus and mutual trust, rather than hierarchical control. The article suggests that the eclectic paradigm needs to be reconfigured to incorporate the role of inter-firm relationships and transactions, particularly strategic alliances and networks, in shaping the competitive advantages of firms. It also highlights the importance of location-specific advantages, the spatial integration of economic activities, and the role of national and regional authorities in influencing localized centers of excellence. The article concludes that the shift from hierarchical to alliance capitalism reflects a broader change in the techno-economic system of production, favoring a 'voice' rather than an 'exit' response to market failure. The implications of this shift for the eclectic paradigm include a broader understanding of ownership-specific advantages, the role of inter-firm relationships in shaping these advantages, and the need to incorporate the effects of strategic alliances and networks into the theory of internalization. The article also emphasizes the importance of considering the specific characteristics of firms, including their production, innovation, and ownership strategies, in understanding the determinants of MNE activity.