Foreign Direct Investment in Hungary: Resource Acquisition and Domestic Competitive Advantage

Graham Hooley, Tony Cox, David Shipley, John Fahy, Jozsef Beracs and Kriztina Kolos
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Graham Hooley: Aston Business School
Tony Cox: Trinity College
David Shipley: Aston Business School
John Fahy: Trinity College
Jozsef Beracs: Budapest University of Economic Sciences
Kriztina Kolos: Budapest University of Economic Sciences

Journal of International Business Studies, 1996, vol. 27, issue 4, 683-709

Abstract: This paper examines the impact of foreign direct investment on the marketing resources and capabilities of firms in Hungary. Foreign direct investment into Hungary has been substantial in recent years and is credited as a major factor in leading the transition towards a market-led economy. While the motives of foreign investors to invest and of governments to attract investment have been extensively addressed in the literature, there has been little research on the reasons why individual host firms seek to attract investment. This paper develops a theoretical explanation of host firm motives through the resource-based theory of the firm, proposing that host firms seek resources from their investors that can then be deployed to create competitive advantage over rivals in the domestic market. A series of specific propositions are developed and tested empirically on a large sample of Hungarian enterprises.© 1996 JIBS. Journal of International Business Studies (1996) 27, 683–709

Date: 1996
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