Economics at your fingertips  

What drives foreign direct investment: The role of language, geographical distance, information flows and technological similarity

Amadú Ly, José Esperança and Nebojsa S. Davcik

Journal of Business Research, 2018, vol. 88, issue C, 111-122

Abstract: This paper sheds new light on the impact of linguistic and technological similarities between countries on foreign direct investment (FDI), using an extended gravity model. The model includes technological commonality, as measured by the aggregate production of intellectual property, at the country level. An analysis of 71,309 pairs of FDI relationships, from 2000 to 2012, showed that language is positively associated with a high level of FDI. Technological differences do impede the flow of FDI between countries, and information flow is crucial for large flows of FDI. Information flow diminishes the negative impact of distance.

Keywords: Foreign direct investment; International business; Language; Distance; Technology; Information flow; Gravity model (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

Journal of Business Research is currently edited by A. G. Woodside

More articles in Journal of Business Research from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2019-05-10
Handle: RePEc:eee:jbrese:v:88:y:2018:i:c:p:111-122