In this paper, I first briefly introduce Moon & Roehl’s (1993, 2001) imbalance theory of FDI, then I identify its three deficiencies that may be responsible for the relative lack of impact of the potentially powerful imbalance logic, and then I propose an asymmetry reduction theory (ARC) of FDI and explain its aspiration-resource-control (ARC) framework. I conclude the paper with a brief discussion of the OLI framework being a special case of the ARC framework.