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Distinctive determinant factors of Spanish foreign direct investment in Latin America

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  • Galan, Jose I.
  • Gonzalez-Benito, Javier

Abstract

This paper is based on an empirical study of 103 Spanish multinational companies that have carried out foreign direct investment (FDI) and analyses to what extent the decision to invest in Latin America responds to factors different from those involved in the decision to invest in other destinations. Rooted in the revised eclectic paradigm of Dunning [Dunning, J. H. (1988). The eclectic paradigm of international production: A restatement and some possible extensions, Journal of International Business Studies, 19: 1-31; Dunning, J. H. (1997). Alliance capitalism and global business. New York: Routledge], the research framework includes three types of factors in a disaggregated way: ownership, internalization and location factors. The results show that, indeed, Spanish FDI in Latin America presents some distinctive features within each group of factors, thus indicating cultural affinity as the most important driver for the selection of this destination.

Suggested Citation

  • Galan, Jose I. & Gonzalez-Benito, Javier, 2006. "Distinctive determinant factors of Spanish foreign direct investment in Latin America," Journal of World Business, Elsevier, vol. 41(2), pages 171-189, June.
    • Handle: RePEc:eee:worbus:v:41:y:2006:i:2:p:171-189
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    6. Bersant Hobdari & Evis Sinani & Marina Papanastassiou & Robert Pearce, 2010. "The Determinants of Global Integration Strategies of Chinese Multinationals—Some Empirical Evidence," Review of Market Integration, India Development Foundation, vol. 2(1), pages 61-86, April.
    7. Drogendijk, Rian & Martín Martín, Oscar, 2015. "Relevant dimensions and contextual weights of distance in international business decisions: Evidence from Spanish and Chinese outward FDI," International Business Review, Elsevier, vol. 24(1), pages 133-147.
    8. Fernando Merino, 2013. "Capital structure of foreign affiliates and the investment decision: two questions to consider," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 14(sup1), pages 470-492, June.
    9. Kevin Williams, 2015. "Foreign direct investment in Latin America and the Caribbean: an empirical analysis," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 52(1), pages 57-77, May.
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