Institutional configurations in international investment research

Christopher Weber and Pascal Mayer

No 11/2023, Discussion Papers of the Institute for Organisational Economics from University of Münster, Institute for Organisational Economics

Abstract: In the area of International Business (IB), a substantial body of research has accumulated analyzing the effect of various host country characteristics on foreign direct investments (FDI). Special attention has been given to institutions. However, the conventional approach of addressing institutions in IB research has recently been criticized for not paying sufficient attention to the interrelationships among institutions. We address those calls and conceptualize institutions as 'holistic systems composed of interrelated components' (Kim & Aguilera 2016, p. 149) and employ the fuzzy set Qualitative Comparative Analysis (fsQCA) to investigate the interrelated effect of formal and informal institutions on FDI inflows. In our empirical methodology, we use data on FDI and formal and informal institutions from 57 countries. The results support the configurational approach and corroborate a systemic view on the effect of institutions on FDI. Our study contributes to a more nuanced understanding of the workings of institutions on FDI and demonstrate the value in adopting a configurational perspective in institutional research.

Keywords: Foreign Direct Investment; Institution; International Business; Location Choice; Qualitative Comparative Analysis (search for similar items in EconPapers)
JEL-codes: D02 F21 F23 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-hme and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:umiodp:280408

DOI: 10.17879/50099605169

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