Institutional Quality and FDI to the South : an Analytical Approach

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Desbordes, Rodolphe and Darby, Julia and Wooton, Ian (2011) Institutional Quality and FDI to the South : an Analytical Approach. Discussion paper. University of Strathclyde, Glasgow.

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Abstract

We ask whether MNEs’ experience of institutional quality and political risk within their “home” business environments influences their decisions to enter a given country. We set out an explicit theoretical model that allows for the possibility that firms from South source countries may, by virtue of their experience with poor institutional quality, derive a competitive advantage over firms from North countries with respect to investing in destinations in the South. We show that the experience gained by such MNEs of poorer institutional environments may result in their being more prepared to invest in other countries with correspondingly weak institutions.

ORCID iDs

Desbordes, Rodolphe ORCID logoORCID: https://orcid.org/0000-0001-8923-5401, Darby, Julia ORCID logoORCID: https://orcid.org/0000-0003-4425-7222 and Wooton, Ian ORCID logoORCID: https://orcid.org/0000-0001-5084-6379;
CORE (COnnecting REpositories)