Nation brands and foreign direct investment
Margarita M. Kalamova and
Kai Konrad ()
No SP II 2010-06, Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" from Social Science Research Center Berlin (WZB)
We study the explanatory role of fundamentals versus the effects of nation brands for the size of foreign direct investment (FDI) flows. Using the EUROSTAT data on FDI flows we find that the Anholt Nation Brands Index has a significant and strong impact on FDI flows in a multi-variate analysis that is based on the knowledge-capital (KC) model of FDI. Our results suggest that the nation brands index accounts for important aspects of FDI decisions that are not captured in fundamental data which explain FDI in the standard foreign trade approach to FDI.
Keywords: Country stereotypes; foreign direct investment; knowledge-capital model; nation brands; governance (search for similar items in EconPapers)
JEL-codes: F23 M3 (search for similar items in EconPapers)
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Persistent link: http://EconPapers.repec.org/RePEc:zbw:wzbfff:spii201006
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