John Dunning, Emeritus Professor at the University of Reading, was a leading authority on globalisation who conducted wide-ranging research into the methods and effectiveness of cross-border investment. Globalisation is controversial because while it often helps to spur economic growth it leads some to fear for the dilution of national sovereignty over trade, employment, welfare and the environment. Thanks to Dunning, many more of the practical implications of globalisation were examined.

International investment divides into two parts: on one hand there is portfolio investment, the buying and selling of minority stakes in companies. On another, multinational companies based in one country expand their physical presence overseas through the process commonly known as “foreign direct investment”, or FDI.

Both forms of international investment are integral to globalisation, but it is the latter which, in the eyes of many development-minded politicians and economists, is preferable. It is sometimes said that factories, unlike flighty pure financial investors, cannot get up and walk away.

As Esmee Fairbairn Chair of International Investment and Business Studies at the University of Reading from 1975-87, Dunning marked out the difference between financial investment and FDI. He also furthered understanding of the effectiveness of FDI and the problems it can bring.

Dunning published on the subject as early as 1958. His American Investment in British Manufacturing Industry reported on the contribution to the UK economy by subsidiaries of US multinationals. Dunning found that foreign subsidiaries improved UK employment, productivity, competitiveness and research and development. The expertise in this area was later to help shape the findings of the Reddaway Report that addressed the question of outward FDI by UK firms and its effect on the home economy.

The book was made possible through careful data gathering: Dunning interviewed managers in each of the 160 US subsidiaries operating in the UK. It also comprised empirical analysis and theoretical development. It was in the last of these skills that Dunning was most influential, giving academia the so-called “eclectic” theory of international business.

Dunning developed and tested his eclectic paradigm in a series of influential articles and books, making it encompass all mainstream research in the field. In this, the study of ownership, location and internalisation advantages are combined to explain outgoing FDI by multinational enterprises. The most prominent are International Production and the Multinational Enterprise (1981), The Globalisation of Business: The Challenge of the 1990s (1993) and Alliance Capitalism and Global Business (1997). This work, along with that of colleagues, formed the bedrock of the “Reading School” approach to international business.

Dunning remained at the forefront of teaching and research in international business for more than 40 years and remains one of the most cited academic experts in the field today. He also applied his academic knowledge and insights to public policy. He served with the United Nations in the late 1960s, on a body that became the United Nations Centre on Transnational Corporations, now the Division on Investment Enterprise at Unctad. He was a senior economic adviser to Unctad until his death. He also travelled to dozens of countries in Asia, Africa and Eastern Europe to lecture on the role of multinational enterprises in fostering economic development.

One of Dunning’s later areas of interest was the so-called “moral ecology” of global capitalism. He researched the requirement by international institutions, governments, companies, and individuals to embrace a moral code if global capitalism could hope to be considered as a force for good rather than just being effective or profitable.

John Harry Dunning attended school in Harrow, and after serving as a sub-lieutenant in the RNVR from 1945-1948, was awarded a first class degree in economics from University College London in 1951. He gained his doctorate from Southampton University in 1957. He was appointed the Foundation Chair of Economics at the University of Reading in 1964 and served as department chair for the next 23 years. He was a research professor at Rutgers University, in the US, from 1989-2002, where he developed an influential doctoral programme in international business studies.

He was chairman of the Economists Advisory Group, a London-based consulting firm, in the 1970s. He served as president of the Academy of International Business from 1987-1989 and subsequently as Dean of the Fellows of the AIB. Dunning’s contribution to international business scholarship was recognised by the award of the OBE in 2008. His work was recognised by the award of several honorary degrees from universities in Europe and Asia. The John H Dunning Centre for International Business within the Henley Business School at the University of Reading was renamed in his honour.

Dunning is survived by his wife, Christine, and his son, Philip, by a former marriage.

John Dunning OBE, international business academic, was born on June 26, 1927. He died on January 29, 2009, aged 81