Predictors of inward foreign direct investment: A communication perspective

Abstract

A plethora of studies has investigated the reasons for foreign direct investment (FDI) location, yet findings are still inconclusive and sometimes even contradictory. This study offers a new perspective to better understand FDI location. As communication is at the core of any transaction, including FDI transactions, this study introduced Berlo's communication model into the context of FDI location. Indeed, the postulated model explained a large portion of FDI location in 56 countries. To be more specific, English language proficiency, knowledge, less in-group collectivism, less uncertainty avoidance, and less assertiveness of the FDI host country population were associated with higher levels of inward FDI.