Institutional quality and FDI to the south: an analytical approach

Julia Darby; Rodolphe Desbordes; Ian Wooton

Institutional quality and FDI to the south: an analytical approach

Julia Darby
, Rodolphe Desbordes
, Ian Wooton

Research output: Chapter in Book/Report/Conference proceeding › Chapter

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 language	English
Title of host publication	Firms in the International Economy
Subtitle of host publication	Firm Heterogeneity Meets International Business
Editors	S. Beugelsdijk, S. Brakman, J.H. Garretsen, H. van Ees
Place of Publication	Cambridge MA, USA
Publisher	MIT Press
ISBN (Print)	9780262019743
Publication status	Published - Dec 2013

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 10 Reduced Inequalities

Keywords

institutional quality
FDI
MNE
business environment
foreign direct investment

Cite this

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title = "Institutional quality and FDI to the south: an analytical approach",

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.",

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author = "Julia Darby and Rodolphe Desbordes and Ian Wooton",

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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: MIT Press, 2013.

Research output: Chapter in Book/Report/Conference proceeding › Chapter

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.

PB - MIT Press

CY - Cambridge MA, USA

ER -

Institutional quality and FDI to the south: an analytical approach

Abstract

UN SDGs

Keywords

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Institutional Quality and FDI to the South: an Analytical Approach

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