Targeting the Foreign Direct Investor Strategic Motivation, Investme

Foreign Direct Investment (FDI) is one avenue for offering assistance to developing countries in their efforts to grow. Small countries typically have limited resources to direct toward investment attraction programs, so the ability to segment the market

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TARGETING THE FOREIGN DIRECT INVESTOR Strategic Motivation, Investment Sue, and Developing Country Investment-Attraction Packages

Edward J. Coyne, Sr., C.D.(Hon.)(Jamaica) B. Se., M.I.B.A., Ph. D. Sehool of Business & Entrepreneurship Nova Southeastern University

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Springer Science+Business Media, LLC

ISBN 978-1-4613-5971-5 ISBN 978-1-4615-2299-7 (eBook) DOI 10.1007/978-1-4615-2299-7 Library of Congress Cataloging-in-Publication Data A C.I.P. Catalogue record for this book is available from the Library of Congress.

Copyright © 1995 by Springer Science+Business Media New York OriginaHy published by Kluwer Academic Publishers in 1995 Softcover reprint ofthe hardcover lst edition 1995 AH rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, mechanical, photo-copying, recording, or otherwise, without the prior written permission of the publisher, Springer Science+Business Media, LLC.

Printed an acid-free paper.

DEDICATION

To the people of Jamaica.

TABLE OF CONTENTS TARGETING THE FOREIGN DIRECT INVESTOR Strategic Motivationl Investment Size and Developing Country Investment-Attraction Packages LIST OF FIGURES

ix

LIST OF TABLES

x

ABBREVIATIONS

Xl

FORWORD: Peter J. Buckley, Professor of International Business Director, Centre for International Business University of Leeds

xiii

PREFACE

xv

Chapter I: INTRODUCTION The Need For This Study FDI Attraction Research Stages - Evolution of Focus

1 2 4

Chapter II: WHAT'S WHAT: Definitions & Theories: FDI, MNCs, International Trade Foreign Direct Investment (FDI) Multinational Corporations (MNCs) Some Key Theories AffectingFDI & MNC's Summary

15 15 17 18 31

Chapter III. WHO SEES WHAT ?: Protagonists and Their Perceptions ofFDI Debate: FDIIMNC Value Alternatitives to FDI Summary

37 39 43 45

Chapter IV: WHO WANTS WHAT ?: MNC Strategic Motivation / FDI Attraction MNC Motivation for Initiating FDI Host Country FDI Attraction Policies Differing Effects of Host Country Incentives Summary

49 49 52 55 60

Chapter V: WHERE TO TEST ?: Barbados, Jamaica, Trinidad-Tobago Introduction to Host Countries FDI and the Host Countries Summary

65 67 71 74

viii

Contents

Chapter VI: WHAT'S THE ROUTE ?: Study Methodology Nature of the Information Sought Summary of Survey Response Analytical Methods Employed

79 79 89 92

Chapter VII: WHAT TO EXPECT: The Hypotheses The Research Hypotheses Key Assumptions Underlying the Study Null Hypotheses

99 99 105 109

Chapter VIII: WHAT WORKS FOR WHOM ?: Study Findings and Interpretations Findings Quantum / Asset Specificity Surrogate FDI Motivation & MNC Preferences Quantum & FDI Motivation Summary of Findings and lAP Preferences

113 113 113 119 129 143

Chapter IX: WHO SAID WHAT ?: Comparison ofFindings with Other Researchers Summary

147 151

Chapter X: WHAT IT ALL MEANS: Interpretations ofFindings Interpretations of Micro-Group Preferences Host Country Market-seeking MNCs Cost Reduction-seeking MNCs Raw Material-seeking MNCs

155 155 156 162 16