Determinant factors of outward FDI: a process of cumulative capabilities

The internationalization process of firms through foreign direct investment(FDI) responds to an individual decision, and for that reason much of the analy-sis on this has been done at the microeconomic level, revealing that the pre-sence of certain ownership advantages would justify the emergence of Multi-national Enterprises (MNEs). The country level’ constraints have been mostlyconsidered in studies covering the decisions related to FDI locations. However,there is still little evidence of the outward FDI determinants at the aggregatelevel; this is precisely the focus of this paper. The recent emergence of multi-national firms in developing countries makes even more interesting the analy-sis of these factors and how they relate to ownership advantages explainingoutward FDI. Our analysis uses a sample integrated by 48 countries, includingboth developed and developing economies. Results show that a set of ma-croeconomic factors affect the cumulative process of capabilities accumulationthat derives into outward investments, but this set of factors differs betweenthe two groups of countries studied.

Isabel Álvarez
Celia Torrecillas
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