Template-Type: ReDIF-Paper 1.0
Author-Name: Rodolphe Desbordes
Author-Name-First: Rodolphe
Author-Name-Last: Desbordes
Author-Email: rodolphe.desbordes@strath.ac.uk
Author-Workplace-Name: Department of Economics, University of Strathclyde
Author-Name: Julia Darby
Author-Name-First: Julia
Author-Name-Last: Darby
Author-Email: julia.darby@strath.ac.uk
Author-Workplace-Name: Department of Economics, University of Strathclyde
Author-Name: Ian Wooton
Author-Name-First: Ian
Author-Name-Last: Wooton
Author-Email: ian.wooton@strath.ac.uk
Author-Workplace-Name: Department of Economics, University of Strathclyde
Title: Institutional Quality and FDI to the South: An Analytical Approach
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.
Length: 18 pages
Creation-Date: 2011-10
Revision-Date: 
Publication-Status: Published
File-URL: http://www.strath.ac.uk/media/1newwebsite/departmentsubject/economics/research/researchdiscussionpapers/2011/11-31-Final.pdf
File-Format: Application/pdf
Number: 11-31
Classification-JEL: F23, O1
Keywords: foreign direct investment, multinational enterprises, institutional quality
Handle: RePEc:str:wpaper:11-31