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Market familiarity and the location of South and North MNEs

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

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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Paper provided by Business School - Economics, University of Glasgow in its series Working Papers with number 2012_05.

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Date of creation: Apr 2012
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Handle: RePEc:gla:glaewp:2012_05

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

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