The FDI location decision: modelling conceptions of distance

Cookson, Graham David, Blanc-Brude, Frederic, Piesse, Piesse and Strange, Roger (2012) The FDI location decision: modelling conceptions of distance. Academy of Management Proceedings, 1. ISSN 0065-0668

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Abstract

We investigate how different conceptions of distance impact upon one of the fundamental decisions made by foreign investors, the choice of foreign direct investment (FDI) location within the selected host country. Most the extant literature treats alternative locations as distinct places, and implicitly assumes that the distances between these alternative locations have no impact upon the likelihood of FDI location. However, the boundaries between these locations are often quite arbitrary and defined by administrative fiat rather than political-economic reality, and proximate locations may well impact significantly upon each other's attractiveness to foreign investors. This results in a situation of spatial dependence which, if ignored, can give raise to various estimation and inference problems. The contribution of this paper is to investigate different specifications of this spatial dependence linked to various geographical, economic and administrative measures of distance.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > Business and Management
Subjects: H Social Sciences
Depositing User: Tahir Beydola
Date Deposited: 11 Dec 2015 15:04
Last Modified: 11 Dec 2015 15:04
URI: http://sro.sussex.ac.uk/id/eprint/58806
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