Evaluating the effects of formal and informal institutional on multinational enterprises working in Saudi Arabia

Nasser Alshareef

Global Business and Economics Review, 2022, vol. 27, issue 2, 167-191

Abstract: Foreign direct investment is unique in a way that it offers an opportunity for the investor to invest in a host country in multiple ways. Formal and informal institutions play significant roles in attracting foreign direct investment made by multinational enterprises. The current work aims to explore the influence of formal and informal institutional avoidance, adaption, and co-evolution factors for the inflow of FDI as perceived by the MNEs working in KSA as an evolutionary approach to international business. The data was collected from the British MNEs working in KSA and was analysed with logistic regression. The study results suggest the formal institutional avoidance and adaptation factors significantly influence the inflow of FDI as perceived by the MNEs working in KSA. While the formal institutional co-evolution factors insignificantly influence the FDI in KSA. For the informal institutional factors, only informal avoidance significantly influences the FDI in KSA.

Keywords: foreign direct investment; FDI; institutions; multinationals; formal; informal; multinational enterprises; MNEs; capital. (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:ids:gbusec:v:27:y:2022:i:2:p:167-191

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