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Behavioural influences in Portuguese foreign direct investment

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  • Pinheiro-Alves, Ricardo

Abstract

The paper presents a behavioural economics approach to FDI. It relies on questionnaires and interviews with Portuguese managers to present evidence of the role played by herding, anchoring, mental accounting and other behavioural rules in FDI location decisions. It originates a set of heuristics influencing the direction of FDI flows and it confirms the prediction of the (Heiner, 1983) and (Heiner, 1989) that the higher the uncertainty faced by decision makers the more frequent will be the use of behavioural rules. The results go beyond neoclassical theory by helping to explain non-maximizing decision-making by managers.

Suggested Citation

  • Pinheiro-Alves, Ricardo, 2011. "Behavioural influences in Portuguese foreign direct investment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(4), pages 394-403, August.
  • Handle: RePEc:eee:soceco:v:40:y:2011:i:4:p:394-403
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    References listed on IDEAS

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    Cited by:

    1. Pierdzioch, Christian & Reid, Monique B. & Gupta, Rangan, 2016. "Inflation forecasts and forecaster herding: Evidence from South African survey data," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 62(C), pages 42-50.
    2. Shima'a Hanafy, 2015. "Determinants of FDI Location in Egypt—Empirical Analysis Using Governorate Panel Data," MAGKS Papers on Economics 201513, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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