TITLE

Strategic factors affecting foreign direct investment decisions by multi-national enterprises in Latin America

AUTHOR(S)
Trevi�o, Len J.; Mixon Jr., Franklin G.
PUB. DATE
August 2004
SOURCE
Journal of World Business;Aug2004, Vol. 39 Issue 3, p233
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
Cross-country differences in macroeconomic and institutional environments are used to explain MNE behavior, as proxied by foreign direct investments (FDIs) inflows to seven Latin American countries, namely Argentina, Brazil, Chile, Columbia, Mexico, Peru and Venezuela for the period 1988-1999. Results indicate that the institutional approach is dominant, thus supporting recent FDJ research that has included statistical measures of institutional reform in their models. Since MNEs must conform to the institutional environment prevailing in the host country, managers should undertake FDI where there is minimal institutional distance between the home and the host country environments. In addition, government officials should place increased emphasis on institutional reform if their objective is to increase inward FDI in their countries. Finally, any assistance provided by non-governmental organizations, such as the IMF and the World Bank, should also emphasize institutional reform.
ACCESSION #
14106980

 

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