Determinants of German Foreign Direct Investment: A Case of Failure?
The aim of this paper is to explain Foreign Direct Investment of German enterprises. The theory of Foreign Direct Investment identifies a variety of location-specific, strategic, financial, as well as other motives which firms have in order to become multinationals. We apply the above theoretical schemata to the case of German enterprises and we also consider the evolution of German FDI in a historical context. The main conclusion of the research findings is that financial, strategic and location specific factors have been historically very influential in the decision of these firms to invest abroad. Thus both big businesses and SMEs invest mainly in Europe, with the US as the second-best location option. However, nowadays, there is a limited but essential trend that this may change. We argue that although historically location specific factors have been the most influential for FDI activity, in the current globalisation process German enterprises tend to shape their investment strategy on broader factors which influence core developments in the international economy. Thus the emergence of the BRIC (Brazil, Russia, India, China) emerging markets may change for ever the character of German FDI. If however this does not occur, the German industry may face, severe competitive pressures form its foreign rivals over the next years.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Feldman, Gerald D., 1997. "The Great Disorder: Politics, Economics, and Society in the German Inflation, 1914-1924," OUP Catalogue, Oxford University Press, number 9780195101140, December.
- E. Thalassinos, 2007. "Trade Regionalization, Exchange Rate Policies and EU-US Economic Cooperation," European Research Studies Journal, European Research Studies Journal, vol. 0(1-2), pages 111-118.
When requesting a correction, please mention this item's handle: RePEc:ers:journl:v:xii:y:2009:i:2:p:3-26. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Giorgos Zachopoulos)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.