Exploring relationships between nation branding and foreign direct investment

John Schoeneman () and Jami Fullerton ()
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John Schoeneman: Oklahoma State University
Jami Fullerton: Oklahoma State University

Place Branding and Public Diplomacy, 2023, vol. 19, issue 3, No 2, 266-279

Abstract: Abstract This study explores the influence of nation branding on a country’s ability to send and receive foreign direct investment (FDI). Employing Anholt’s Nation Brand Index (NBI) and FDI data, the relationship is analyzed using valued exponential random graph models (ERGM) to account for interdependence between FDI flows while simultaneously estimating the changes in FDI flows in respect to differences in NBI scores. The study finds that while a stronger nation brand does contribute positively to both incoming and outgoing FDI flows, there are important differences in how different categories of nation branding contribute to FDI flows. Namely, the Export category is strongly associated with outgoing FDI, the Investment, Government, and Culture categories are positively associated with incoming FDI, and that the People and Tourism categories are negatively associated with incoming FDI. This study contributes to the nascent literature on place branding in that it combines the prominent Eclectic Paradigm for FDI from the economics literature with marketing and communication literature’s theories on nation branding.

Keywords: Nation branding; Foreign direct investment; Network analysis; Country-of-origin effect (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1057/s41254-022-00264-4

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