Fdi Decisions Based On A Multi-Dimensional Macro-Economic Approach In The Automotive Industry: Theoretical Foundations And Empirical Evidence

Purpose: Foreign direct investments have been grown and accelerated over the last decades due to the ongoing globalization process. This determines that companies and their managers have to make decisions in respect to the FDI. Macro-economic factors increase their importance when companies go international. The macro-economic framework cannot be directly influenced by the managers and this forces them to adapt and fit to the given circumstances. During such complex processes also intervening factors may attract or distract FDI decisions. The purpose is to develop a model to investigate the impact of macro-economic and intervening factors on FDI decision-making process. Methods: Developing a postulated causal model on potential impacts of macro-economic factors on FDI decisions with respect to FDI incentive schemes and risk/uncertainty potential intervening factors during decision process. Findings: The conducted data show, macro-economic factors have a strong influence on FDI decisions and often are not that considered before starting such ventures. FDI incentives seem to be able to strongly positively impact FDI decisions. Risk/Uncertainty on the macro-level have a slight, but significant negative impact. Limitations: The research was conducted on the specific characteristics of German and Austrian automotive industry. Implications: The study underlines the perception of the investors' point of view. Originality: A new causal model has been developed with focus on different levels of macro-economic determinants and FDI motives with respect to FDI decisions from the perspective of investors. The key contribution to management science is the holistic fine graining of potential impact environment of macro-economic factors, FDI incentive schemes and risk/uncertainties on the management FDI decision-making process.