Institutional quality and FDI to the south

an analytical approach

Julia Darby, Rodolphe Desbordes, Ian Wooton

Research output: Chapter in Book/Report/Conference proceedingChapter

Abstract

We ask whether MNEs' experience of institutional quality and political risk within their “home” business environments influences their decisions to enter a given country. We set out an explicit theoretical model that allows for the possibility that firms from South source countries may, by virtue of their experience with poor institutional quality, derive a competitive advantage over firms from North countries with respect to investing in destinations in the South. We show that the experience gained by such MNEs of poorer institutional environments may result in their being more prepared to invest in other countries with correspondingly weak institutions.
Original languageEnglish
Title of host publicationFirms in the International Economy
Subtitle of host publicationFirm Heterogeneity Meets International Business
EditorsS. Beugelsdijk, S. Brakman, J.H. Garretsen, H. van Ees
Place of PublicationCambridge MA, USA
Publication statusPublished - Dec 2013

Fingerprint

Multinational enterprises
Institutional quality
Business environment
Destination
Competitive advantage
Political risk
Institutional environment
Investing

Keywords

  • institutional quality
  • FDI
  • MNE
  • business environment
  • foreign direct investment

Cite this

Darby, J., Desbordes, R., & Wooton, I. (2013). Institutional quality and FDI to the south: an analytical approach. In S. Beugelsdijk, S. Brakman, J. H. Garretsen, & H. van Ees (Eds.), Firms in the International Economy: Firm Heterogeneity Meets International Business Cambridge MA, USA.
Darby, Julia ; Desbordes, Rodolphe ; Wooton, Ian. / Institutional quality and FDI to the south : an analytical approach. Firms in the International Economy: Firm Heterogeneity Meets International Business. editor / S. Beugelsdijk ; S. Brakman ; J.H. Garretsen ; H. van Ees. Cambridge MA, USA, 2013.
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Darby, J, Desbordes, R & Wooton, I 2013, Institutional quality and FDI to the south: an analytical approach. in S Beugelsdijk, S Brakman, JH Garretsen & H van Ees (eds), Firms in the International Economy: Firm Heterogeneity Meets International Business. Cambridge MA, USA.

Institutional quality and FDI to the south : an analytical approach. / Darby, Julia; Desbordes, Rodolphe; Wooton, Ian.

Firms in the International Economy: Firm Heterogeneity Meets International Business. ed. / S. Beugelsdijk; S. Brakman; J.H. Garretsen; H. van Ees. Cambridge MA, USA, 2013.

Research output: Chapter in Book/Report/Conference proceedingChapter

TY - CHAP

T1 - Institutional quality and FDI to the south

T2 - an analytical approach

AU - Darby, Julia

AU - Desbordes, Rodolphe

AU - Wooton, Ian

N1 - SIRE DISCUSSION PAPER; SIRE-DP-2011-70

PY - 2013/12

Y1 - 2013/12

N2 - We ask whether MNEs' experience of institutional quality and political risk within their “home” business environments influences their decisions to enter a given country. We set out an explicit theoretical model that allows for the possibility that firms from South source countries may, by virtue of their experience with poor institutional quality, derive a competitive advantage over firms from North countries with respect to investing in destinations in the South. We show that the experience gained by such MNEs of poorer institutional environments may result in their being more prepared to invest in other countries with correspondingly weak institutions.

AB - We ask whether MNEs' experience of institutional quality and political risk within their “home” business environments influences their decisions to enter a given country. We set out an explicit theoretical model that allows for the possibility that firms from South source countries may, by virtue of their experience with poor institutional quality, derive a competitive advantage over firms from North countries with respect to investing in destinations in the South. We show that the experience gained by such MNEs of poorer institutional environments may result in their being more prepared to invest in other countries with correspondingly weak institutions.

KW - institutional quality

KW - FDI

KW - MNE

KW - business environment

KW - foreign direct investment

UR - http://hdl.handle.net/10943/353

UR - http://mitpress.mit.edu/books/firms-international-economy

M3 - Chapter

SN - 9780262019743

BT - Firms in the International Economy

A2 - Beugelsdijk, S.

A2 - Brakman, S.

A2 - Garretsen, J.H.

A2 - van Ees, H.

CY - Cambridge MA, USA

ER -

Darby J, Desbordes R, Wooton I. Institutional quality and FDI to the south: an analytical approach. In Beugelsdijk S, Brakman S, Garretsen JH, van Ees H, editors, Firms in the International Economy: Firm Heterogeneity Meets International Business. Cambridge MA, USA. 2013