Institutional Quality and FDI to the South: An Analytical Approach

Rodolphe Desbordes, Julia Darby, Ian Wooton

Research output: Working paperDiscussion paper

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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
Place of PublicationGlasgow
PublisherUniversity of Strathclyde
Number of pages18
Publication statusPublished - Aug 2011


  • foreign direct investment
  • multinational enterprises
  • institutional quality


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  • Institutional quality and FDI to the south: an analytical approach

    Darby, J., Desbordes, R. & Wooton, I., Dec 2013, Firms in the International Economy: Firm Heterogeneity Meets International Business. Beugelsdijk, S., Brakman, S., Garretsen, J. H. & van Ees, H. (eds.). Cambridge MA, USA

    Research output: Chapter in Book/Report/Conference proceedingChapter

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