This paper seeks to provide a rationale for changing trends in the flow and determinants of foreign direct investment (FDI) as a result of macro-economic and firm strategy considerations. We identify several factors that impact on such trends, and develop propositions that could explain the phenomenon generically. The study then provides preliminary empirical support for the propositions presented, and outlines the path for further research needed to investigate more causal links. The statistical analysis of investments by US multinational enterprises (MNEs) reveals significant changes in the regional distribution of FDI, and a change in some of its traditional determinants. Results show that US MNEs are now making increasing investments into Asia to exploit low wage levels and to secure entry into new markets. Journal of International Business Studies (2003), 34, 315–326. doi:10.1057/palgrave.jibs.8400034
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.