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Factors determining the location decisions of Spanish MNEs: an analysis based on the investment development path


Author Info

  • Jose I Galan

    (Departamento de Administraci�n y Econom�a de la Empresa, Universidad de Salamanca, Spain)

  • Javier Gonzalez-Benito

    (Departamento de Administraci�n y Econom�a de la Empresa, Universidad de Salamanca, Spain)

  • Jose A Zu�iga-Vincente

    (Departamento de Econom�a de la Empresa (Administraci�n, direcci�n y organizaci�n), Universidad Rey Juan Carlos, Madrid, Spain)

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    On the basis of theoretical assumptions approached via the investment development path (IDP), this study examines the most important factors for and against the location decisions in foreign direct investment taken by multinational enterprises, considering host countries at very different stages of economic development (Latin American and European Union countries). We carry out different kinds of analysis on a sample of 103 firms belonging to a medium-sized country that has recently achieved the status of developed country. The results reveal that the importance that home country firm managers give to diverse location factors depends to a certain extent on the stage that each group of host countries has reached in the IDP. In line with prior research, we find that firm managers consider mainly the group of factors associated with strategic asset-seeking when deciding to locate their investments in the group of more developed countries (European Union). In contrast, our results show that when these firm managers choose the group of less developed countries (Latin America), social and cultural factors play a more determinant role, thus suggesting the importance of historical and cultural ties between the home and host countries. Journal of International Business Studies (2007) 38, 975–997. doi:10.1057/palgrave.jibs.8400304

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    Bibliographic Info

    Article provided by Palgrave Macmillan in its journal Journal of International Business Studies.

    Volume (Year): 38 (2007)
    Issue (Month): 6 (November)
    Pages: 975-997

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    Handle: RePEc:pal:jintbs:v:38:y:2007:i:6:p:975-997

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    Postal: Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK

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    Cited by:
    1. Lei, Han-Sheng & Chen, Yung-Shuan, 2011. "The right tree for the right bird: Location choice decision of Taiwanese firms' FDI in China and Vietnam," International Business Review, Elsevier, Elsevier, vol. 20(3), pages 338-352, June.
    2. Demirbag, Mehmet & Tatoglu, Ekrem & Glaister, Keith W., 2009. "Equity-based entry modes of emerging country multinationals: Lessons from Turkey," Journal of World Business, Elsevier, Elsevier, vol. 44(4), pages 445-462, October.
    3. Jiménez, Alfredo & Delgado-García, Juan Bautista, 2012. "Proactive management of political risk and corporate performance: The case of Spanish multinational enterprises," International Business Review, Elsevier, Elsevier, vol. 21(6), pages 1029-1040.
    4. Cesaroni, Fabrizio & Giarratana, Marco S. & Martínez-Ros, Ester, 2012. "Technological capabilities and cost efficiency as antecedents of foreign market entry," MERIT Working Papers 049, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    5. Narula, Rajneesh & Dunning, John H., 2009. "Multinational enterprises, development and globalisation: Some clarifications and a research agenda," MERIT Working Papers 023, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    6. Li, Peter Ping, 2010. "Toward a learning-based view of internationalization: The accelerated trajectories of cross-border learning for latecomers," Journal of International Management, Elsevier, Elsevier, vol. 16(1), pages 43-59, March.


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