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Market Familiarity and the Location of South and North MNEs

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  • Azemar, Celine
  • Darby, Julia
  • Desbordes, Rodolphe
  • Wooton, Ian

Abstract

We use a systematic empirical analysis of the determinants of South-South (SS) and North-South (NS) foreign direct investment (FDI) as a canvas to explore how multinational enterprises’ (MNEs) location decisions are shaped by better acquaintance with a foreign market resulting from bilateral ties, experience of international expansion, and knowledge of how to deal with poor governance. We find that these various aspects of market familiarity, which can interact together, are important to explain and differentiate the location behaviours of South MNEs (S-MNEs) and North MNEs (N-MNEs) in developing countries.

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Bibliographic Info

Paper provided by Scottish Institute for Research in Economics (SIRE) in its series SIRE Discussion Papers with number 2012-15.

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Date of creation: 2012
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Handle: RePEc:edn:sirdps:318

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Keywords: South-South FDI; governance; institutions; familiarity; distance;

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