Institutions and inflows of foreign direct investment: a fuzzy-set analysis

Abstract

This study addresses the essential question of causal complexity and diversity related to the influence of institutions on the direct investments (FDI) of multinational enterprises. Using a relatively new methodological approach of fuzzy-set analysis, and 47 host countries from the period 1999 to 2003, the paper analyses how and why countries with different degrees of membership in different institutional constraints either attract or do not attract FDI. The findings show that institutional factors have diverse influences. Similar institutions may even be associated with different outcomes if different regional categories of countries are examined. Countries may neither be attractive nor unattractive owing to the presence or absence of a single institutional factor. Instead, the outcome usually results from a combination of institutional conditions. Moreover, there typically are several possible paths to a specific outcome. The study confirms some of the propositions of previous theory, but, most importantly, it explains why earlier research has provided conflicting conclusions related to institutional factors. The study also offers an approach for future international business research to apply fuzzy-set methods and develop mid-range theories. Journal of International Business Studies (2008) 39, 652–669. doi:10.1057/palgrave.jibs.8400371

A set-theoretic analysis of negotiations in Japanese MNEs: Opening up the black box

“…In line with previous research (Ragin, 2006;Pajunen, 2008;Schneider et al 2010), the causal conditions (INTSTRAT, WINSTRAT, PAT) are necessary conditions for the outcome, first offer (FOFFREA). Table 3 below shows the outcome.…”

“…Woodside et al (2011) and Woodside and Zhang (2013) use it for consumer behavior and provide new insights into behavioral issues. The results of recent articles (Geckhamer, 2011, Kvist, 2007Pajunen, 2008;Schneider, Schulze-Bentrop and Paunescu 2010) show the strength of a configurational approach. Palmer (2006) emphasizes that qualitative methods are appropriate for those dimensions of organizational behavior which researchers find difficult to measure and that rigorous protocols now exist for conducting qualitative research (Ragin, 2000).…”

“…In international business, Pajunen (2008) and Schneider et al (2010) use fsQCA for investigations into the institutional side of foreign direct investment and institutional capital of high-tech firms with regard to export performance. These insights into fsQCA strengthen the analysis of the negotiation model of MNE HQ-Subsidiary relationships.…”

Firm survival: The role of incubators and business characteristics

“…Certain fields, such as organizational change management, HRM or the resource-based view (RBV) employ the configurational comparative method to complete insufficient statistical analyses from prior studies (Fiss, 2007;Grandori and Furnari, 2008;Pajunen, 2008;Schneider, Schulze-Bentrop, and Paunescu, 2009;Greckhamer, 2011;Hsu, Woodside, and Marshall, 2013;Woodside, 2013). A configurational comparative method assumes complex causality-a condition or combination of minimum necessary and/or sufficient conditions for a particular outcome-and nonlinear relationships where, "variables found to be causally related in one configuration may be unrelated or even inversely related in another" (Meyer et al, 1993(Meyer et al, : 1178.…”

Do Labour Rights Matter for Export? A Qualitative Comparative Analysis of Pineapple Trade to the EU

“…For example, the decline in pineapple export share to the EU from Côte d'Ivoire since the mid-1980s was partly explained by political instability, high turnover of private and public institutions, withdrawal of state support for the agricultural sector, and the civil war (Vagneron, Faure, & Loeillet, 2009). Institutions, as business facilitators, may also indirectly affect trade through the relationship with investment (Pajunen, 2008). European importers particularly value a positive institutional environment in-country, because a good judicial system makes it easier to do business and facilitates contract enforcement (Richards, Gelleny, & Sacko, 2001).…”