STRATEGIC MANAGEMENT DECISIONS IN THE CONTEXT OF FOREIGN DIRECT INVESTMENT. THE ROLE OF INSTITUTIONS AND ECONOMIC DETERMINANTS

Ligita Sarkute (), Darjel Sina (), Kreshnik Bello () and Arben Vercuni ()
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Ligita Sarkute: Faculty of Political Science and Diplomacy, Vytautas Magnus University, Kaunas, Lithuania
Darjel Sina: Faculty of Law, European University of Tirana, Republic of Albania
Kreshnik Bello: Faculty of Economics, European University of Tirana, Albania
Arben Vercuni: Faculty of Economics, Agricultural University of Tirana, Albania

Sustainable Regional Development Scientific Journal, 2024, vol. I, issue 1, 40-54

Abstract: Emerging markets have grown in importance as investment and corporate objectives because of globalization. Multinational corporations use foreign direct investment (FDI) as a strategical investment decision to gain a competitive advantage. The purpose of the study is to investigate the role of formal and informal institutional determinants of FDI and how multinational Companies (MNCs) base their strategic investment concerning the institutional environment of emerging and developing markets. Consulting the existing literature in relation to the quality of institutions and their relevance and impact on foreign direct investment strategies and investment decision process this study includes and analyze all institutions (Political, Regulatory, Economic and Cultural) that have an impact on the FDI management strategic investment decision. Herewith the study came with concrete findings and recommendations for potential international investors, local institutions but also organization involved with investment promotion. Based on the relevant theory and primary research findings five research questions and hypotheses were developed to address the research problem "Does institutional and economic determinants impact the strategic investment decision? The study results found that institution environment role on the FDI exist, and these effects include not only countries and regions but also the sector specific industries. When considering from strategic management perspective they are significant enough to dictate investment decision choice and strategies for selecting the country market that offers institutional and economic context that is in the best interest of the foreign investors. The results obtained are specific for a particular case and limited in the scope, so they cannot be applied to some other countries and regions. However, these results yield important theoretical and practical implications for international companies and policymakers throughout the region. For this purpose, interviews have been conducted including four experts representing.

JEL-codes: F21 F30 G20 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:bfb:srdjou:2024-07_2

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