Location Attractiveness in the New Norm: A Systematic Review

Abstract

Foreign Direct Investment (FDI) spatial dimensions are witnessing paradigm shifts with the acceleration of digital transformation and adoption of disruptive technologies, emergence of Covid-19 which has triggered unexpected dynamics in the open system, erosion of brick-and-mortar paradigm in service sectors such as Financial Services and Information Technology, and blurring lines of locational advantages. Despite the intellectual continuity and diversity driving the premise of FDI-foreign location research stream, a comprehensive literature review of location attractiveness is lacking, especially in the context of the new norm. This paper systematically reviews the theoretical and empirical research on FDI location by content-analyzing 221 articles published between 1999 and 2023. Innovation, digital transformation, human capital, and knowledge-related assets are identified as the emerging trends and determinants influencing host-location attractiveness for FDI by MNEs in the new norm. This paper also provides recommendations for future research avenues aimed at enriching the body of knowledge in this research stream.