Seeking greener pastures: a theoretical and empirical investigation into the changing trend of foreign direct investment flows in response to institutional and strategic factors

The national bioenergy investment model: Technical documentation

“…The question the model seeks to answer is, which of a set of business models are likely to receive domestic investment funds or FDI, and in what quantities? In contrast, most research on FDI focuses on other factors, including: FDI flows to countries (rather than projects) (Asiedu 2002, Sethi et al 2002, Akinkugbe 2003, Ahlquist 2006, Blonigen et al 2007, Busse and Hefeker 2007, Jinjarak 2007, Lim 2008, Dippenaar 2009); mode of entry (Kogut and Nath 1988, Hennart and Park 1993, Li and Filer 2007, Li and Rugman 2007, Nocke and Yeaple 2007, Asmussen et al 2009); the impact of FDI on host countries (Jenkins 2006, Adams, 2009, Chaudhuri 2010; and the decision making process within a particular firm (Dahlquist and Robertsson 2001, Moosa 2002, White and Fan 2006, Carlesi et al 2007, Dippenaar 2009, Klier 2009, Kinda 2010. A survey of the literature on FDI identified one paper assessing the potential of projects within a portfolio to attract foreign investment (Li and Sherali 2003); however, the methodology in that paper requires detailed knowledge of the projects and is unsuitable for a simulation model.…”

FDI distribution within China: An integrative conceptual framework for analyzing intra-country FDI variations

“…The institutional economics literature has analyzed the role of government incentives (Dicken & Tickell, 1992;Woodward & Rolfe, 1993) under the following approaches: (1) liberalizing the general environment for trade and investment at the macro level; (2) incentives targeted to attract FDI into specific industries/sectors; and (3) project-specific incentives negotiated with individual MNEs (Sethi, Guisinger, Ford, & Phelan, 2002). Research however has shown that tax incentives and infrastructure supports do not always attract significant FDI, especially into the hightechnology sector (Beattie, 2003;.…”

“…are met (Sethi et al, 2002). Furthermore, prerequisites for the high-technology sector such as communications, IT infrastructure, and technical skills are far more stringent than those for the manufacturing or extractive industry sectors.…”

“…FDI inflows have also been analyzed at the level of a group of countries and regions (Nigh, 1985;Noorbakhsh & Paloni, 2001;Sethi et al, 2002). However, traditional country-level FDI determinants cannot analyze intracountry FDI variations, and no comprehensive collection of FDI determinants exists within this research stream that can fully explain FDI inflow variations even at the country-level.…”

“…Research in the institutional economics stream has linked FDI inflows to the level of development of countries and regions, and established that FDI would gradually seek out "greener pastures" in search of new markets, lower wages, and other location advantages (Mudambi & Navarra, 2002;Ozawa, 1992;Sethi et al, 2002). Sometimes national and/or provincial governments even withdraw FDI incentives in order to decongest polluted locations; e.g., the Chinese government prohibited inward FDI into manufacturing industries in the Beijing National Capital Region and shut down some plants to control pollution before the Beijing Olympics (Beijing Report, 2006;Ljungwall & Linde-Rahr, 2005).…”