Determinants of Foreign Direct Investment in Developed Economies: A Comparison between European and Non-European Countries
Year: 2010
Type: article
Abstract: We analyse the determinants of foreign direct investment (FDI) by multinational enterprises (MNEs), in developed economies (DCs). We compare between EU and non-EU DCs, in the context of an estimated equation derived from economic theory, which compares the main demand and supply-side determinants of FDI. We contribute to the literature in three ways. First, by comparing between European and non-European DCs. Second, by employing different proxies for the determinants in question. Third, by testing for the relative importance of total factor productivity (TFP) as a determinant of FDI in the two sets of countries. Our results are in line with theoretical predictions, but point to the special importance of TFP as a determinant par excellence of FDI in DCs. They also highlight differences even within developed, European and non-European counties.
DOI: 10.1093/cpe/bzq004
Author: E. E. N. Piteli
Institution: University of Leeds
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2123608914