IDEAS home Printed from
   My bibliography  Save this article

Foreign Direct Investment: Localization And Institutional Determinants


  • Nuno Carlos LEITÃO

    (Polytechnic Institute of Santarém, Complexo Andaluz Apt -295 ,2001- 904 Santarém , Portugal)


This article examines the foreign direct investment (FDI) in Portugal, i.e why foreign companies are located in Portugal. The compression of the determinants of FDI is important to take decisions on economic policy. The determinants of the location were used as market size, labour cost, taxes and economic stability. Beyond these were introduced two institutional variables the impact of globalization and corruption on FDI. The study applies a panel data approach (Fixed Effects and GMM system estimator). The results show that the market size and globalization has a positive impact on FDI. The corruption has a negative impact on investor decisions. Wages, inflation and taxes are also statistically significant.

Suggested Citation

  • Nuno Carlos LEITÃO, 2011. "Foreign Direct Investment: Localization And Institutional Determinants," Management Research and Practice, Research Centre in Public Administration and Public Services, Bucharest, Romania, vol. 3(2), pages 1-6, June.
  • Handle: RePEc:rom:mrpase:v:3:y:2011:i:2:p:1-6

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Farok J. Contractor & Susan M. Mudambi, 2008. "The influence of human capital investment on the exports of services and goods: An analysis of the top 25 services outsourcing countries," Management International Review, Springer, vol. 48(4), pages 433-445, April.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Ivan Deseatnicov & Hiroya Akiba, 2013. "Reconsideration of the Effects of Political Factors on FDI: Evidence from Japanese Outward FDI," Review of Economics & Finance, Better Advances Press, Canada, vol. 3, pages 35-48, February.
    2. Razvan Catalin DOBREA & Elena Iuliana SERBAN, 2011. "The Contribution Of Foreign Direct Investments To Performance And Competitiveness Growth Of Receivers Countries," Management Research and Practice, Research Centre in Public Administration and Public Services, Bucharest, Romania, vol. 3(3), pages 42-52, September.
    3. Muhammad Shahbaz & Smile Dube & Ilhan Ozturk & Abdul Jalil, 2015. "Testing the Environmental Kuznets Curve Hypothesis in Portugal," International Journal of Energy Economics and Policy, Econjournals, vol. 5(2), pages 475-481.
    4. Nuno Carlos Leit o, 2015. "Energy Consumption and Foreign Direct Investment: A Panel Data Analysis for Portugal," International Journal of Energy Economics and Policy, Econjournals, vol. 5(1), pages 138-147.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yadong Luo & Huan Zhang & Juan Bu, 2019. "Developed country MNEs investing in developing economies: Progress and prospect," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(4), pages 633-667, June.
    2. Vinh Nhat Lu & Pascale G. Quester & Christopher J. Medlin & Brett Scholz, 2011. "Determinants of export success in professional business services: a qualitative study," The Service Industries Journal, Taylor & Francis Journals, vol. 32(10), pages 1637-1652, November.
    3. Bello, Daniel C. & Radulovich, Lori P. & Javalgi, Rajshekhar (Raj) G. & Scherer, Robert F. & Taylor, Jennifer, 2016. "Performance of professional service firms from emerging markets: Role of innovative services and firm capabilities," Journal of World Business, Elsevier, vol. 51(3), pages 413-424.
    4. Jesus Maria Irigoyen & Josefa Monteagudo & Alexander Rutkowski, 2012. "A closer look at some drivers of trade performance at Member State level," Quarterly Report on the Euro Area (QREA), Directorate General Economic and Financial Affairs (DG ECFIN), European Commission, vol. 11(2), pages 29-39, July.
    5. Christopher L. Erickson & Peter Norlander, 2022. "How the past of outsourcing and offshoring is the future of post‐pandemic remote work: A typology, a model and a review," Industrial Relations Journal, Wiley Blackwell, vol. 53(1), pages 71-89, January.
    6. Konara, Palitha & Wei, Yingqi, 2019. "The complementarity of human capital and language capital in foreign direct investment," International Business Review, Elsevier, vol. 28(2), pages 391-404.
    7. Martina Musteen & Mujtaba Ahsan & Taekyung Park, 2017. "SMEs, Intellectual Capital, and Offshoring of Service Activities: An Empirical Investigation," Management International Review, Springer, vol. 57(4), pages 603-630, August.
    8. Charles E. Bryant & Rajshekhar G. Javalgi, 2016. "Global Economic Integration in Developing Countries: The Role of Corruption and Human Capital Investment," Journal of Business Ethics, Springer, vol. 136(3), pages 437-450, July.
    9. Denitsa Hazarbassanova Blagoeva & Peter D. Ørberg Jensen & Hemant Merchant, 2020. "Services in International Business Studies: A Replication and Extension of Merchant and Gaur (2008)," Management International Review, Springer, vol. 60(3), pages 427-457, June.
    10. Farok J. Contractor & Vikas Kumar & Sumit K. Kundu & Torben Pedersen, 2010. "Reconceptualizing the Firm in a World of Outsourcing and Offshoring: The Organizational and Geographical Relocation of High-Value Company Functions," Journal of Management Studies, Wiley Blackwell, vol. 47(s2), pages 1417-1433, December.
    11. Angélique Breuillot, 2021. "Exploring the Role of Diversity Management During Early Internationalizing Firms’ Internationalization Process," Management International Review, Springer, vol. 61(2), pages 125-156, April.
    12. Cahen, Fernanda Ribeiro & Lahiri, Somnath & Borini, Felipe Mendes, 2016. "Managerial perceptions of barriers to internationalization: An examination of Brazil's new technology-based firms," Journal of Business Research, Elsevier, vol. 69(6), pages 1973-1979.
    13. Francesca D'Auria & Jesus Maria Irigoyen & Josefa Monteagudo & Plamen Nikolov & Alexander Rutkowski & Michael Sket & Ann-Louise Winther, . "Quarterly Report on the Euro Area (QREA), Vol.11, No.2 (2012)," Quarterly Report on the Euro Area (QREA), Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    14. Stefan Schmid & Sebastian Baldermann, 2021. "CEOs’ International Work Experience and Compensation," Management International Review, Springer, vol. 61(3), pages 313-364, June.
    15. Christos Staboulis & Dimitrios Natos & Alexandros Gkatsikos & Efthimia Tsakiridou & Konstadinos Mattas & Waldemar Bojar & Piotr Baranowski & Jaromir Krzyszczak & Obdulia Parra Rivero & Álvaro Ojeda Ro, 2022. "Assessing the Role of the Young Farmer Scheme in the Export Orientation of Greek Agriculture," Sustainability, MDPI, vol. 14(6), pages 1-13, March.
    16. Gilberto Fraga & Carlos Bacha, 2011. "The Non-linearity of the Relationship between Human Capital and Exports in Brazil – evidences of regional differences," ERSA conference papers ersa11p1016, European Regional Science Association.
    17. Debmalya Mukherjee & Satish Kumar & Naveen Donthu & Nitesh Pandey, 2021. "Research Published in Management International Review from 2006 to 2020: A Bibliometric Analysis and Future Directions," Management International Review, Springer, vol. 61(5), pages 599-642, October.
    18. Jarosław M. Nazarczuk & Stanisław Umiński & Tomasz Brodzicki, 2020. "Determinants of the spatial distribution of exporters in regions: the role of ownership," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 64(3), pages 547-574, June.
    19. Sarishma Sharma & Khushdeep Dharni, 2020. "Measurement and reporting of intangible assets: orientation of Indian practitioners," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 47(2), pages 125-135, June.
    20. Susan M. Mudambi & Stephen Tallman, 2010. "Make, Buy or Ally? Theoretical Perspectives on Knowledge Process Outsourcing through Alliances," Journal of Management Studies, Wiley Blackwell, vol. 47(s2), pages 1434-1456, December.

    More about this item


    Foreign Direct Investment; Panel Data; Portugal; Globalization and Corruption.;
    All these keywords.

    JEL classification:

    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rom:mrpase:v:3:y:2011:i:2:p:1-6. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Colesca Sofia (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.