IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Determinants of Greenfield Investment in Knowledge Intensive Business Services

  • Martin Falk

This study investigates the determinants of bilateral Greenfield FDI projects and flows in knowledge intensive business services from OECD/BRIC countries to the EU countries for the period 2003-2010. Greenfield FDI projects are distinguished by type of activity: (i) business services, (ii) design, development and testing activities, (iii) headquarters activities and (iv) R&D services. Another aim of this study is to provide new empirical evidence on the patterns of Greenfield investments in knowledge intensive business services over time, source country and destination country. For Austria, the number of Greenfield investments in headquarter functions remains stable over time whereas Greenfield investments in R&D and related activities declined during the sample period. The same holds true for the number of jobs generated through greenfield investments. The results using panel count data models show that wage costs, tertiary education, corporate taxes, having a common border and sharing a common language all play a significant role in determining bilateral Greenfield FDI projects in knowledge intensive services. However, the impact of corporate taxation and labour costs differs widely across the functions and does not play a role in Greenfield investments in R&D and development, design and testing services.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
File Function: full text
Download Restriction: none

Paper provided by FIW in its series FIW Research Reports series with number IV-002.

in new window

Length: 41
Date of creation: Dec 2012
Date of revision:
Handle: RePEc:wsr:ecbook:2012:i:iv-002
Contact details of provider:

Order Information: Postal: FIW Project Office Austrian Institute of Economic Research Arsenal Objekt 20 A-1030 Vienna

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.:

as in new window
  1. Narula, Rajneesh & Bellak, Christian, 2008. "EU enlargement and consequences for FDI assisted industrial development," MERIT Working Papers 067, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  2. Azemar, Celine & Desbordes, Rodolphe, 2009. "Short-Run Strategies For Attracting Foreign Direct Investment," SIRE Discussion Papers 2009-27, Scottish Institute for Research in Economics (SIRE).
  3. Chiara Criscuolo & Jonathan E. Haskel & Matthew J. Slaughter, 2005. "Global Engagement and the Innovation Activities of Firms," NBER Working Papers 11479, National Bureau of Economic Research, Inc.
  4. V.N. Balasubramanyam, 2008. "Foreign Direct Investment," Chapters, in: International Handbook of Development Economics, Volumes 1 & 2, chapter 39 Edward Elgar.
  5. Ronald B. Davies & Rodolphe Desbordes, 2012. "Greenfield FDI and Skill Upgrading," The Institute for International Integration Studies Discussion Paper Series iiisdp395, IIIS.
  6. Mayer, Thierry & Zignago, Soledad, 2006. "Notes on CEPII’s distances measures," MPRA Paper 26469, University Library of Munich, Germany.
  7. Runjuan Liu & Dorothee J Feils & Barry Scholnick, 2011. "Why are different services outsourced to different countries?," Journal of International Business Studies, Palgrave Macmillan, vol. 42(4), pages 558-571, May.
  8. Santos Silva, J.M.C. & Tenreyro, Silvana, 2011. "Further simulation evidence on the performance of the Poisson pseudo-maximum likelihood estimator," Economics Letters, Elsevier, vol. 112(2), pages 220-222, August.
  9. Zwinkels, Remco C.J. & Beugelsdijk, Sjoerd, 2010. "Gravity equations: Workhorse or Trojan horse in explaining trade and FDI patterns across time and space?," International Business Review, Elsevier, vol. 19(1), pages 102-115, February.
  10. Aleksandra Riedl, 2010. "Location factors of FDI and the growing services economy," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 18(4), pages 741-761, October.
  11. Arie Lewin & Silvia Massini & Carine Peeters, 2008. "Why are companies offshoring innovation ?the emerging global race for talent," Working Papers CEB 08-009, ULB -- Universite Libre de Bruxelles.
  12. Chakrabarti, Avik, 2001. "The Determinants of Foreign Direct Investment: Sensitivity Analyses of Cross-Country Regressions," Kyklos, Wiley Blackwell, vol. 54(1), pages 89-113.
  13. Strauss-Kahn, Vanessa & Vives, Xavier, 2006. "Why and where do headquarters move?," IESE Research Papers D/650, IESE Business School.
  14. Bunyaratavej, Kraiwinee & Hahn, Eugene D. & Doh, Jonathan P., 2007. "International offshoring of services: A parity study," Journal of International Management, Elsevier, vol. 13(1), pages 7-21, March.
  15. Mehmet Demirbag & Keith W. Glaister, 2010. "Factors Determining Offshore Location Choice for R&D Projects: A Comparative Study of Developed and Emerging Regions," Journal of Management Studies, Wiley Blackwell, vol. 47(s2), pages 1534-1560, December.
  16. Jonathan P Doh & Kraiwinee Bunyaratavej & Eugene D Hahn, 2009. "Separable but not equal: The location determinants of discrete services offshoring activities," Journal of International Business Studies, Palgrave Macmillan, vol. 40(6), pages 926-943, August.
  17. Giuseppe Nicoletti & Steve Golub & Dana Hajkova & Daniel Mirza & Kwang-Yeol Yoo, 2003. "Policies and International Integration: Influences on Trade and Foreign Direct Investment," OECD Economics Department Working Papers 359, OECD Publishing.
  18. Magdolna Sass & Martina Fifekova, 2010. "Offshoring and Outsourcing Business Services to Central and Eastern Europe: Some Empirical and Conceptual Considerations," European Planning Studies, Taylor & Francis Journals, vol. 19(9), pages 1593-1609, October.
  19. J. M. C. Santos Silva & Silvana Tenreyro, 2006. "The Log of Gravity," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 641-658, November.
  20. Walter Kuemmerle, 1999. "The Drivers of Foreign Direct Investment into Research and Development: An Empirical Investigation," Journal of International Business Studies, Palgrave Macmillan, vol. 30(1), pages 1-24, March.
  21. Michael A Witt & Arie Y Lewin, 2007. "Outward foreign direct investment as escape response to home country institutional constraints," Journal of International Business Studies, Palgrave Macmillan, vol. 38(4), pages 579-594, July.
  22. Michele FRATIANNI, 2007. "The Gravity Equation in International Trade," Working Papers 307, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  23. Ivar Kolstad & Espen Villanger, 2004. "Determinants of foreign direct investment in services," CMI Working Papers WP 2004: 2, CMI (Chr. Michelsen Institute), Bergen, Norway.
  24. Voget, Johannes, 2011. "Relocation of headquarters and international taxation," Journal of Public Economics, Elsevier, vol. 95(9-10), pages 1067-1081, October.
  25. J.C.M. Santos Silva & Silvana Tenreyro, 2011. "poisson: Some convergence issues," Economics Discussion Papers 695, University of Essex, Department of Economics.
  26. Tomi Laamanen & Tatu Simula & Sami Torstila, 2012. "Cross-border relocations of headquarters in Europe," Journal of International Business Studies, Palgrave Macmillan, vol. 43(2), pages 187-210, February.
  27. Manning, Stephan & Ricart, Joan E. & Rosatti Rique, Maria Soledad & Lewin, Arie Y., 2010. "From blind spots to hotspots: How knowledge services clusters develop and attract foreign investment," Journal of International Management, Elsevier, vol. 16(4), pages 369-382, December.
  28. Alberto Di Minin & Jieyin Zhang, 2010. "An Exploratory Study on International R&D Strategies of Chinese Companies in Europe," Review of Policy Research, Policy Studies Organization, vol. 27(4), pages 433-455, 07.
  29. Pari Patel & Keith Pavitt, 1991. "Large Firms in the Production of the World’s Technology: An Important Case of “Non-Globalisation”," Journal of International Business Studies, Palgrave Macmillan, vol. 22(1), pages 1-21, March.
  30. Voget, Johannes, 2011. "Relocation of headquarters and international taxation," Journal of Public Economics, Elsevier, vol. 95(9), pages 1067-1081.
  31. Miao Wang & M. C. Sunny Wong, 2009. "What Drives Economic Growth? The Case of Cross-Border M&A and Greenfield FDI Activities," Kyklos, Wiley Blackwell, vol. 62(2), pages 316-330, 04.
  32. Arie Y Lewin & Silvia Massini & Carine Peeters, 2009. "Why are companies offshoring innovation? The emerging global race for talent," Journal of International Business Studies, Palgrave Macmillan, vol. 40(8), pages 1406-1406, October.
  33. Bala Ramasamy & Matthew Yeung, 2010. "The Determinants of Foreign Direct Investment in Services," The World Economy, Wiley Blackwell, vol. 33(4), pages 573-596, 04.
  34. Bergstrand, Jeffrey H. & Egger, Peter, 2007. "A knowledge-and-physical-capital model of international trade flows, foreign direct investment, and multinational enterprises," Journal of International Economics, Elsevier, vol. 73(2), pages 278-308, November.
  35. Dossani, Rafiq & Kenney, Martin, 2007. "The Next Wave of Globalization: Relocating Service Provision to India," World Development, Elsevier, vol. 35(5), pages 772-791, May.
  36. Bunyaratavej, Kraiwinee & Hahn, Eugene D. & Doh, Jonathan P., 2008. "Multinational investment and host country development: Location efficiencies for services offshoring," Journal of World Business, Elsevier, vol. 43(2), pages 227-242, March.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:wsr:ecbook:2012:i:iv-002. 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: ()

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.