Escape FDI and the dynamics of a cumulative process of institutional misalignment and contestation: stress, strain and failure

Barnard, Helena and Luiz, John M (2018) Escape FDI and the dynamics of a cumulative process of institutional misalignment and contestation: stress, strain and failure. Journal of World Business. ISSN 1090-9516

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Abstract

We argue that escape foreign direct investment (FDI) happens when unknown future “rules of the game” cause concern about the continued productive capacity of the economy. Adapting the stress-strain-fail model of materials failure, we argue that escape FDI is a process with three cumulative phases. Conditions for escape FDI (stress) are created by institutional deterioration and contained contestation. Limited escape FDI (strain) results from periods of societal instability and/or inadequate institutional reforms. Extensive escape FDI (failure) results from pervasive societal instability and/or fundamental changes in institutions. Using a historical approach, we develop these propositions for South Africa, 1956 to 2012.

Item Type: Article
Keywords: Escape FDI
Schools and Departments: School of Business, Management and Economics > Business and Management
Subjects: H Social Sciences > H Social Sciences (General)
Depositing User: John Luiz
Date Deposited: 22 Mar 2018 16:33
Last Modified: 23 May 2018 12:03
URI: http://sro.sussex.ac.uk/id/eprint/74591

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