 The Location Decisions of Multinationals and the Cultural Link: Evidence from Spanish Direct Investment AbroadSalvador Barrios () and Juan Benito Ostolaza Economic Papers, 2010, vol. 29, issue 2, 181-196 Abstract: We examine the way in which differences in language and culture may affect direct investment decisions. We use a discrete choice approach to model the location decisions of multinationals in which cultural links, language differences, distance and market access are accounted for. This model is used to study the determinants of the location decisions of Spanish multinationals over the period 1988–1997. Cultural ties, including language, are found significantly to affect the location decisions of Spanish firms abroad. These ties, also explain the leading position of Spanish multinationals in Latin American countries compared to more advanced home countries such as the United States, Germany and the United Kingdom. The specific advantage of Spanish multinationals together with the rapid economic development of the Spanish economy, which has traditionally been a large FDI‐recipient, tend to corroborate the view that intangible assets such as culture and language proximity do matter in understanding net outward investment patterns. Date: 2010 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:econpa:v:29:y:2010:i:2:p:181-196 Ordering information: This journal article can be ordered from Access Statistics for this article Economic Papers is currently edited by Professor Guay Lim More articles in Economic Papers from The Economic Society of Australia Contact information at EDIRC. |
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