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LOCATION CHOICE OF DIRECT FOREIGN INVESTORS: AN EXPERIMENTAL RESEARCH ON FACTORS DISCUSSED IN THE CURRENT FOREIGN STUDIES and METHODS USED IN THE ANALYSES

Year 2020, Volume: 8 Issue: 1, 1 - 26, 15.07.2020
https://doi.org/10.18825/iremjournal.529056

Abstract

One
of the most important benefits of globalizing economies is that it opens the
way for foreign direct investments by multinational corporations. Many
developing countries see foreign direct investment inflows as a new door for
economic development opportunity. From the perspective of multinational
companies who want to carry out foreign direct investment, the strategic importance of the location selection
emerges.
In this study, it is aimed to make an exploratory research to
determine the factors that play an important role in attracting or removing
foreign direct investors, which are effective in the location selection
decision of the host country. For this purpose,
the factors which are considered as the determinants of the location selection
decisions of foreign investors in the foreign literature and the effects of
these factors on the location selection decision will be explained with the
help of past studies. After that, the contributions of the current foreign
studies since the 2000s to the foreign direct decision of the foreign investors
will be mentioned. It is thought that the study will guide the future research
by revealing the factors and the most influential factors affecting foreign
direct investment in the decision of the host country.




References

  • Anderson,E. & Gatignon, H. (1986). Modes of foreign entry: A transaction cost analysis and propositions. Journal of International Business Studies, 17: 1–26.
  • Anderson, J., & Sutherland, D. (2015). Entry mode and emerging market MNEs: An analysis of Chinese Greenfield and Acquisition FDI in the United States. Research in International Business and Finance, 35: 88–103. Aw, B-Y. & Lee, Y. (2008), Firm Heterogeneity and Location Choice of Taiwanese Multinationals. Journal of International Economics, 75: 167-79.
  • Barassi, M.R. & Ying, Z. (2012). The Impact of Corruption on FDI: A Parametric and Non Parametric Analysis. European Journal of Political Economy, 28(3): 302–12.
  • Basile R., Castellani D. and Zanfei A. (2008). Location choices of multinational firms in Europe: the role of national boundaries and EU policy. Journal of International Economics, 74: 328–340.
  • Belkhodja, O., Mohiuddin, M. & Karuranga, E. (2017). The Determinants of FDI Location Choice in China: A Discrete-Choice Analysis. Applied Economics, 49 (13): 1241-1254.
  • Buckley, P. J., & Casson, M. (1976). The future of multinational enterprises. London: Macmillan.
  • Burt, R. S. (1997). The contingent value of social capital. Administrative Science Quarterly, 42(2): 339–365.
  • Cantwell, J.A. (1989). Technological innovations and multinational corporations. London: Basil Blackwell.
  • Chidlow, A., Salciuviene, L., & Young, S. (2009). Regional Determinants of Inward FDI Distribution in Poland. International Business Review, 18: 119-113.
  • Çinko, L. (2009). Doğrudan Yabancı Sermaye Hareketlerinin Makroekonomik Etkileri. Marmara Üniversitesi iktisadi ve İdari Bilimler Fakültesi Dergisi, 26 (1): 117 -131.
  • De Simone, E. & D’Uva, M (2017). Social Support, Industrial Parks and FDI Location Choice across Hungarian Counties. Social Indicators Research,133 (3): 1031-1045.
  • Debaere, P., Hongshik, L. & Joonhyung L. (2010). It matters where you go: Outward foreign direct investment and multinational employment growth at home. Journal of Development Economics, 91: 301-309.
  • Deng, P. (2009). Why do Chinese firms tend to acquire strategic assets in international expansion? Journal of World Business, 44(1): 74-84.
  • Dicken, P. (1998). Global Shift: Transforming the World Economy, Third Edition, Paul Chapman, New York.
  • Disdier, A., & Mayer, T. (2004). How different is Eastern Europe: structure and determinants of location choices by French firms in Eastern and Western Europe. Journal of Comparative Economics, 32: 280-296.
  • Du, JL, Lu, Y & Tao, ZG. (2008a). Economic institutions and FDI location choice: Evidence from US multinationals in China. Journal of Comparative Economics, 36(3): 412–29.
  • Du, JL, Lu, Y & Tao, ZG. (2008b). FDI location choice: Agglomeration vs institutions. International Journal of Finance & Economics, 13(1): 92–107.
  • Du J.L., Lu Y. & Tao Z.G. (2012). Institutions and FDI location choice: The role of cultural distances. Journal of Asian Economics, 23(3): 210–223.
  • Dunning, J. H. (1977). Trade, location of economic activity and the MNE: a search for an eclectic approach In Ohlin, B.; Hessleborn, P. ve Wijkman P. (eds) The Allocation of Economic Activity, MacMillan, London.
  • Dunning, J. H. (1979). Explaining changing patterns of international production: some empirical tests. Oxford Bulletin of Economics and Statistics, 41: 269-296.
  • Dunning, J.H. (1980). Toward an Eclectic Theory of International Production: Some Empirical Tests. Journal of International Business Studies, 11: 9–31.
  • Dunning, J. H. (1988). Explaining international Production, Unwin Hyman, London.
  • Dunning, J. H. (1993). Multinational Enterprises and the Global Economy, Addison-Wesley, New York.
  • Dunning, J. H. (1995). Reappraising the Eclectic Paradigm in an Age of Alliance Capitalism. Journal of International Business Studies, 26: 461–491.
  • Dunning, J. H. (1998). Location and the multinational enterprise: a neglect factor? Journal of International Business Studies, 29: 45-66.
  • Finkelstein, S. & Hambrick, D. (1996). Strategic Leadership: Top Executives and their Effects on Organizations, Minneapolis: West Publishers.
  • Hamel, G. & Prahalad, C.K. (1989). Strategicintent. Harvard Business Review. 67(3): 63-67.
  • Helpman, E. (1984). The factor content of foreign trade. The Economic Journal, 94: 84–94.
  • Horst, T. (1972). Firms and Industry Determinants of Decision to Invest Abroad: An Empirical Study. Review of Economics and Statistics, 54: 258–266.
  • Horstmann, I.J. & Markusen, J.R. (1992). Endogenous market structures in international trade (natura facit saltum). Journal of International Economics, 32: 109–129.
  • Huett, P., Baum, M., Schwens, C., & Kabst, R. (2014). Foreign direct investment location choice of small- and medium-sized enterprises: The risk of value erosion of firm-specific resources. International Business Review, 23: 952–965.
  • Jean, R.B.,Tan, D. & Sinkovics, R.R. (2011). Ethnic ties, location choice, and firm performance in foreign direct investment: A study of Taiwanese business groups FDI in China. International Business Review, 20: 627–635.
  • Jiang, G. F., Holburn, G. L. F. & Beamish, P. W. (2014). The impact of vicarious experience on foreign location strategy. Journal of International Management, 20(3): 345–358.
  • Jindra, B., Hassan, S. S., & Cantner, U. (2016). What does location choice reveal about knowledge-seeking strategies of emerging market multinationals in the EU? International Business Review, 25(1): 204–220.
  • Kang Y. & Jiang, F. (2012). FDI location choice of Chinese multinationals in East and Southeast Asia: traditional economic factors and institutional perspective. J World Bus, 47: 45–53.
  • Kang, J. & Lee, H.S. (2007). The determinants of location choice of South Korean FDI in China. Japan and the World Economy, 19 (4): 441-460.
  • Kang, Y. & Liu, Y. (2016) Natural resource-seeking intent and regulatory forces: Location choice of Chinese outward foreign direct investment in Asia. Management Research Review, 39(10): 1313-1335.
  • Krugman, P. (1991). Geography and Trade. MIT Press, Cambridge, MA.Laulajainen, R. ve Stafford, H. (1995). Corporate Geography: Business Location Principles and Cases, Kluwer Academic, Dordrecht.
  • Li, Y., & Hu, J. (2002). Technical efficiency and location choice of small and medium-sized enterprises. Small Business Economics, 19: 1-12.
  • Lien, Y.C. & Filatotchev, I. (2015). Ownership characteristics as determinants of FDI location decisions in emerging economies. Journal of World Business, 50(4): 637–650.
  • Luo, L., Brennan, L., Liu, C., & Luo, Y. (2008). Factors influencing FDI location choice in China’s inland areas. China & World Economy, 16(2): 93–108.
  • Ma, X. & Delios, A. (2007). A New Tale of Two Cities: Japanese FDIs in Shanghai and Beijing, 1973-2003. International Business Review, 16: 207-228.
  • McCann, P. ve Mudambi, R. (2005). Analytical differences in the economics of geography: the case of the multinational firm. Environment and Planning A, 37(10): 1857-1876.
  • Neary, P. (2002). Foreign direct investment and the single market. Manchester School, 70 (3): 291 – 314.
  • North, D.C. (1990). Institutions, Institutional Change and Economic Performance, Cambridge University Press, Cambridge, MA.
  • OECD (1996). Detailed Benchmark Definition of Foreign Direct Investment, Third Edition, OECD Publication, Paris.
  • Resmini, L. & I. Siedschlag (2013). Is Foreign Direct Investment to China Crowding Out the Foreign Direct Investment to Other Countries? China Economic Review, 25: 1-16.
  • Rui, H. & Yip, G.S. (2008). Foreign acquisition by Chinese firms: a strategic intent perspective. Journal of World Business, 43(2): 213-226.
  • Siedschlag, I., Zhang, X., Smith, D., & Turcu, C. (2013). What determines the location choice of R&D activities by multinational firms? Research Policy, 42: 1420-1430.
  • Strange, R., Filatotchev, I., Lien, Y. C., & Piesse, J. (2009). Insider control and the FDI location decision: evidence from firms investing in an emerging market. Management International Review, 49(4): 433–454.
  • UNCTAD, (2005). World Investment Report 2005: Transnational Corporations and the Internationalization of R&D, United Nations Publications, New York.
  • Vernon, R. (1966). International investment and international trade in the Product Cycle. Quarterly Journal of Economics, 80: 190–207.
  • Vernon, R. (1970). Organization as a Scale Factor in the Growth of Firms in J. W. Markham and G. F. Papanek (eds.), Industrial Organization and Economic Development, Boston: Houghton Mifflin, 47–66.
  • Watts, H. D. (1987). Industrial Geography, Longman, Essex.Wu, X. & Strange, R. (2000). The location of foreign insurance companies in China. International Business Review, 9: 383–398.
  • Yavan, N. (2006). Türkiye’de Doğrudan Yabancı Yatırımların Lokasyon Seçimi Üzerine Uygulamalı Bir Araştırma Yayınlanmamış Doktora Tezi, Ankara Üniversitesi Sosyal Bilimler Enstitüsü, Ankara.
  • Yılmaz, G. (2008). Türkiye’de 1980 Sonrası Dönemde Doğrudan Yabancı Sermaye Yatırımlarının Sektörel Analizi ve Ekonomik Kalkınmaya Etkisi. Eskişehir Osmangazi Üniversitesi Osmangazi Üniversitesi İİBF Dergisi, 3(1): 75-97.
  • Yin, F., Ye, M. & Xu, L. (2014). Location determinants of foreign direct investment in services: Evidence from Chinese provincial-level data. London School of Economics and Political Science, Asia Research Centre Working Paper 64.
  • Zheng Y., Yan, D. & Ren, B. (2016). Institutional distance, firm heterogeneities, and FDI location choice of EMNEs. Nankai Business Review International, 7(2): 192-215.

DOĞRUDAN YABANCI YATIRIMCILARIN YER SEÇİMİ: GÜNCEL YABANCI ÇALIŞMALARDA ELE ALINAN FAKTÖRLER ve ANALİZLERDE KULLANILAN YÖNTEMLER ÜZERİNE KEŞİFSEL BİR ARAŞTIRMA

Year 2020, Volume: 8 Issue: 1, 1 - 26, 15.07.2020
https://doi.org/10.18825/iremjournal.529056

Abstract

Küreselleşen
ekonomilerin en önemli getirilerinden biri de çokuluslu şirketler tarafından
yapılan doğrudan yabancı yatırımların yolunu açmasıdır. Birçok gelişmekte olan
ülke, doğrudan yabancı yatırım girişlerini, ekonomik kalkınma fırsatı için yeni
bir kapı olarak görmektedir. Olaya doğrudan yabancı yatırımı gerçekleştirmek
isteyen çokuluslu şirketler perspektifinden bakıldığında ise yer seçiminin
stratejik önemi ortaya çıkmaktadır. Çalışmada, ev sahibi ülkenin yer seçim
kararında etkili olan, doğrudan yabancı yatırımcıları çekme veya uzaklaştırmada
önemli rol oynayan faktörlerin neler olduğunun belirlenmesine dair keşifsel bir
araştırmanın yapılması hedeflenmektedir. Bu amaçla yabancı literatürde doğrudan
yabancı yatırımcıların yer seçim kararlarının belirleyicisi olarak ele alınan
faktörler ve bu faktörlerin yer seçim kararına etkileri geçmiş çalışmalar
yardımıyla açıklanacak, sonrasında, 2000’li yıllardan bu yana yapılan güncel
yabancı çalışmaların doğrudan yabancı yatırımcıların yer seçim kararı konusunda
sağladığı katkılara değinilecektir. Çalışmanın ileride yapılacak araştırmalara,
ev sahibi ülkenin yer seçim kararında doğrudan yabancı yatırımı en çok
etkileyen faktörleri ve etkilerini ortaya koyarak, yol gösterici olacağı
düşünülmektedir.




References

  • Anderson,E. & Gatignon, H. (1986). Modes of foreign entry: A transaction cost analysis and propositions. Journal of International Business Studies, 17: 1–26.
  • Anderson, J., & Sutherland, D. (2015). Entry mode and emerging market MNEs: An analysis of Chinese Greenfield and Acquisition FDI in the United States. Research in International Business and Finance, 35: 88–103. Aw, B-Y. & Lee, Y. (2008), Firm Heterogeneity and Location Choice of Taiwanese Multinationals. Journal of International Economics, 75: 167-79.
  • Barassi, M.R. & Ying, Z. (2012). The Impact of Corruption on FDI: A Parametric and Non Parametric Analysis. European Journal of Political Economy, 28(3): 302–12.
  • Basile R., Castellani D. and Zanfei A. (2008). Location choices of multinational firms in Europe: the role of national boundaries and EU policy. Journal of International Economics, 74: 328–340.
  • Belkhodja, O., Mohiuddin, M. & Karuranga, E. (2017). The Determinants of FDI Location Choice in China: A Discrete-Choice Analysis. Applied Economics, 49 (13): 1241-1254.
  • Buckley, P. J., & Casson, M. (1976). The future of multinational enterprises. London: Macmillan.
  • Burt, R. S. (1997). The contingent value of social capital. Administrative Science Quarterly, 42(2): 339–365.
  • Cantwell, J.A. (1989). Technological innovations and multinational corporations. London: Basil Blackwell.
  • Chidlow, A., Salciuviene, L., & Young, S. (2009). Regional Determinants of Inward FDI Distribution in Poland. International Business Review, 18: 119-113.
  • Çinko, L. (2009). Doğrudan Yabancı Sermaye Hareketlerinin Makroekonomik Etkileri. Marmara Üniversitesi iktisadi ve İdari Bilimler Fakültesi Dergisi, 26 (1): 117 -131.
  • De Simone, E. & D’Uva, M (2017). Social Support, Industrial Parks and FDI Location Choice across Hungarian Counties. Social Indicators Research,133 (3): 1031-1045.
  • Debaere, P., Hongshik, L. & Joonhyung L. (2010). It matters where you go: Outward foreign direct investment and multinational employment growth at home. Journal of Development Economics, 91: 301-309.
  • Deng, P. (2009). Why do Chinese firms tend to acquire strategic assets in international expansion? Journal of World Business, 44(1): 74-84.
  • Dicken, P. (1998). Global Shift: Transforming the World Economy, Third Edition, Paul Chapman, New York.
  • Disdier, A., & Mayer, T. (2004). How different is Eastern Europe: structure and determinants of location choices by French firms in Eastern and Western Europe. Journal of Comparative Economics, 32: 280-296.
  • Du, JL, Lu, Y & Tao, ZG. (2008a). Economic institutions and FDI location choice: Evidence from US multinationals in China. Journal of Comparative Economics, 36(3): 412–29.
  • Du, JL, Lu, Y & Tao, ZG. (2008b). FDI location choice: Agglomeration vs institutions. International Journal of Finance & Economics, 13(1): 92–107.
  • Du J.L., Lu Y. & Tao Z.G. (2012). Institutions and FDI location choice: The role of cultural distances. Journal of Asian Economics, 23(3): 210–223.
  • Dunning, J. H. (1977). Trade, location of economic activity and the MNE: a search for an eclectic approach In Ohlin, B.; Hessleborn, P. ve Wijkman P. (eds) The Allocation of Economic Activity, MacMillan, London.
  • Dunning, J. H. (1979). Explaining changing patterns of international production: some empirical tests. Oxford Bulletin of Economics and Statistics, 41: 269-296.
  • Dunning, J.H. (1980). Toward an Eclectic Theory of International Production: Some Empirical Tests. Journal of International Business Studies, 11: 9–31.
  • Dunning, J. H. (1988). Explaining international Production, Unwin Hyman, London.
  • Dunning, J. H. (1993). Multinational Enterprises and the Global Economy, Addison-Wesley, New York.
  • Dunning, J. H. (1995). Reappraising the Eclectic Paradigm in an Age of Alliance Capitalism. Journal of International Business Studies, 26: 461–491.
  • Dunning, J. H. (1998). Location and the multinational enterprise: a neglect factor? Journal of International Business Studies, 29: 45-66.
  • Finkelstein, S. & Hambrick, D. (1996). Strategic Leadership: Top Executives and their Effects on Organizations, Minneapolis: West Publishers.
  • Hamel, G. & Prahalad, C.K. (1989). Strategicintent. Harvard Business Review. 67(3): 63-67.
  • Helpman, E. (1984). The factor content of foreign trade. The Economic Journal, 94: 84–94.
  • Horst, T. (1972). Firms and Industry Determinants of Decision to Invest Abroad: An Empirical Study. Review of Economics and Statistics, 54: 258–266.
  • Horstmann, I.J. & Markusen, J.R. (1992). Endogenous market structures in international trade (natura facit saltum). Journal of International Economics, 32: 109–129.
  • Huett, P., Baum, M., Schwens, C., & Kabst, R. (2014). Foreign direct investment location choice of small- and medium-sized enterprises: The risk of value erosion of firm-specific resources. International Business Review, 23: 952–965.
  • Jean, R.B.,Tan, D. & Sinkovics, R.R. (2011). Ethnic ties, location choice, and firm performance in foreign direct investment: A study of Taiwanese business groups FDI in China. International Business Review, 20: 627–635.
  • Jiang, G. F., Holburn, G. L. F. & Beamish, P. W. (2014). The impact of vicarious experience on foreign location strategy. Journal of International Management, 20(3): 345–358.
  • Jindra, B., Hassan, S. S., & Cantner, U. (2016). What does location choice reveal about knowledge-seeking strategies of emerging market multinationals in the EU? International Business Review, 25(1): 204–220.
  • Kang Y. & Jiang, F. (2012). FDI location choice of Chinese multinationals in East and Southeast Asia: traditional economic factors and institutional perspective. J World Bus, 47: 45–53.
  • Kang, J. & Lee, H.S. (2007). The determinants of location choice of South Korean FDI in China. Japan and the World Economy, 19 (4): 441-460.
  • Kang, Y. & Liu, Y. (2016) Natural resource-seeking intent and regulatory forces: Location choice of Chinese outward foreign direct investment in Asia. Management Research Review, 39(10): 1313-1335.
  • Krugman, P. (1991). Geography and Trade. MIT Press, Cambridge, MA.Laulajainen, R. ve Stafford, H. (1995). Corporate Geography: Business Location Principles and Cases, Kluwer Academic, Dordrecht.
  • Li, Y., & Hu, J. (2002). Technical efficiency and location choice of small and medium-sized enterprises. Small Business Economics, 19: 1-12.
  • Lien, Y.C. & Filatotchev, I. (2015). Ownership characteristics as determinants of FDI location decisions in emerging economies. Journal of World Business, 50(4): 637–650.
  • Luo, L., Brennan, L., Liu, C., & Luo, Y. (2008). Factors influencing FDI location choice in China’s inland areas. China & World Economy, 16(2): 93–108.
  • Ma, X. & Delios, A. (2007). A New Tale of Two Cities: Japanese FDIs in Shanghai and Beijing, 1973-2003. International Business Review, 16: 207-228.
  • McCann, P. ve Mudambi, R. (2005). Analytical differences in the economics of geography: the case of the multinational firm. Environment and Planning A, 37(10): 1857-1876.
  • Neary, P. (2002). Foreign direct investment and the single market. Manchester School, 70 (3): 291 – 314.
  • North, D.C. (1990). Institutions, Institutional Change and Economic Performance, Cambridge University Press, Cambridge, MA.
  • OECD (1996). Detailed Benchmark Definition of Foreign Direct Investment, Third Edition, OECD Publication, Paris.
  • Resmini, L. & I. Siedschlag (2013). Is Foreign Direct Investment to China Crowding Out the Foreign Direct Investment to Other Countries? China Economic Review, 25: 1-16.
  • Rui, H. & Yip, G.S. (2008). Foreign acquisition by Chinese firms: a strategic intent perspective. Journal of World Business, 43(2): 213-226.
  • Siedschlag, I., Zhang, X., Smith, D., & Turcu, C. (2013). What determines the location choice of R&D activities by multinational firms? Research Policy, 42: 1420-1430.
  • Strange, R., Filatotchev, I., Lien, Y. C., & Piesse, J. (2009). Insider control and the FDI location decision: evidence from firms investing in an emerging market. Management International Review, 49(4): 433–454.
  • UNCTAD, (2005). World Investment Report 2005: Transnational Corporations and the Internationalization of R&D, United Nations Publications, New York.
  • Vernon, R. (1966). International investment and international trade in the Product Cycle. Quarterly Journal of Economics, 80: 190–207.
  • Vernon, R. (1970). Organization as a Scale Factor in the Growth of Firms in J. W. Markham and G. F. Papanek (eds.), Industrial Organization and Economic Development, Boston: Houghton Mifflin, 47–66.
  • Watts, H. D. (1987). Industrial Geography, Longman, Essex.Wu, X. & Strange, R. (2000). The location of foreign insurance companies in China. International Business Review, 9: 383–398.
  • Yavan, N. (2006). Türkiye’de Doğrudan Yabancı Yatırımların Lokasyon Seçimi Üzerine Uygulamalı Bir Araştırma Yayınlanmamış Doktora Tezi, Ankara Üniversitesi Sosyal Bilimler Enstitüsü, Ankara.
  • Yılmaz, G. (2008). Türkiye’de 1980 Sonrası Dönemde Doğrudan Yabancı Sermaye Yatırımlarının Sektörel Analizi ve Ekonomik Kalkınmaya Etkisi. Eskişehir Osmangazi Üniversitesi Osmangazi Üniversitesi İİBF Dergisi, 3(1): 75-97.
  • Yin, F., Ye, M. & Xu, L. (2014). Location determinants of foreign direct investment in services: Evidence from Chinese provincial-level data. London School of Economics and Political Science, Asia Research Centre Working Paper 64.
  • Zheng Y., Yan, D. & Ren, B. (2016). Institutional distance, firm heterogeneities, and FDI location choice of EMNEs. Nankai Business Review International, 7(2): 192-215.
There are 58 citations in total.

Details

Primary Language Turkish
Journal Section ARTICLES
Authors

Yağmur Öz 0000-0002-2546-8879

Publication Date July 15, 2020
Submission Date February 19, 2019
Acceptance Date June 2, 2020
Published in Issue Year 2020 Volume: 8 Issue: 1

Cite

APA Öz, Y. (2020). DOĞRUDAN YABANCI YATIRIMCILARIN YER SEÇİMİ: GÜNCEL YABANCI ÇALIŞMALARDA ELE ALINAN FAKTÖRLER ve ANALİZLERDE KULLANILAN YÖNTEMLER ÜZERİNE KEŞİFSEL BİR ARAŞTIRMA. International Review of Economics and Management, 8(1), 1-26. https://doi.org/10.18825/iremjournal.529056