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Determinants of FDI Incentive Preferences of MNEs

Author

Listed:
  • Robert J Rolfe

    (University of South Carolina)

  • David A Ricks

    (Thunderbird AGSIM)

  • Martha M Pointer

    (East Tennessee State University)

  • Mark McCarthy

    (East Carolina University)

Abstract

In this study, managers of U.S. firms with operations in the Caribbean region evaluated the attractiveness of twenty host country incentives. Multivariate analysis of variance was employed to determine whether incentive preferences were a function of investment characteristics. The results indicate that incentive preferences depend on the type of investment, market orientation, size of investment, geographic location, year of investment, and type of product. Furthermore, exporters considered import duty concessions to be more desirable than did investors oriented toward the local markets. These results indicate that government programs waiving import duties, such as the free trade zones of the Dominican Republic and the maquiladora program of northern Mexico, are providing the incentive deemed most important by their targeted investors.© 1993 JIBS. Journal of International Business Studies (1993) 24, 335–355

Suggested Citation

  • Robert J Rolfe & David A Ricks & Martha M Pointer & Mark McCarthy, 1993. "Determinants of FDI Incentive Preferences of MNEs," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 24(2), pages 335-355, June.
    • Handle: RePEc:pal:jintbs:v:24:y:1993:i:2:p:335-355
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    Citations

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    Cited by:

    1. Isabel Faeth, 2009. "Determinants Of Foreign Direct Investment – A Tale Of Nine Theoretical Models," Journal of Economic Surveys, Wiley Blackwell, vol. 23(1), pages 165-196, February.
    2. Giner, Jose Miguel & Giner, Graciela, 2004. "An interpretative model of foreign direct investment in China: An economic policy approach," China Economic Review, Elsevier, vol. 15(3), pages 268-280.
    3. Ram Mudambi, 1999. "Multinational Investment Attraction: Principal-Agent Considerations," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 6(1), pages 65-79.
    4. Annamaria Nifo & Gaetano Vecchione, 2015. "A quali imprese vanno i sussidi pubblici? evidenza dall?industria manifatturiera italiana," RIVISTA DI ECONOMIA E STATISTICA DEL TERRITORIO, FrancoAngeli Editore, vol. 2015(3), pages 5-28.
    5. Ahmet Türel & Nihat Tas & Mustafa Genç & Burcu Özden, 2017. "Audit Firm Tenure and Audit Quality Implied by Discretionary Accruals and Modified Opinions: Evidence from Turkey," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 13(1), pages 187-196, February.
    6. Lu, Chin-Shan & Yang, Ching-Chiao, 2007. "An evaluation of the investment environment in international logistics zones: A Taiwanese manufacturer's perspective," International Journal of Production Economics, Elsevier, vol. 107(1), pages 279-300, May.
    7. Peter Buckley & Chen Meng, 2005. "The Strategy of foreign-invested manufacturing enterprises in China: Export-orientated and market-orientated FDI revisited," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 3(2), pages 111-131.
    8. Demirbag, Mehmet & Tatoglu, Ekrem & Glaister, Keith W., 2007. "Factors influencing perceptions of performance: The case of western FDI in an emerging market," International Business Review, Elsevier, vol. 16(3), pages 310-336, June.
    9. Luisa R. Blanco & Cynthia L. Rogers, 2012. "Do Tax Havens Really Flourish?," Global Economy Journal (GEJ), World Scientific Publishing Co. Pte. Ltd., vol. 12(3), pages 1-23, August.
    10. Md. Qamruzzaman & Salma Karim, 2020. "Nexus between Economic Volatility, Trade Openness and FDI: An Application of ARDL, NARDL and Asymmetric Causality," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 10(7), pages 790-807, July.
    11. Louis T., Jr. Wells & Nancy J. Allen & Jacques Morisset & Neda Pirnia, 2001. "Using Tax Incentives to Compete for Foreign Investment : Are They Worth the Costs?," World Bank Publications - Books, The World Bank Group, number 13979.
    12. Aldaba, Rafaelita M., 2006. "FDI Investment Incentive System and FDI Inflows: The Philippine Experience," Discussion Papers DP 2006-20, Philippine Institute for Development Studies.
    13. Lim, Sung-Hoon, 2005. "Foreign investment impact and incentive: a strategic approach to the relationship between the objectives of foreign investment policy and their promotion," International Business Review, Elsevier, vol. 14(1), pages 61-76, February.
    14. Paul, Justin & Feliciano-Cestero, María M., 2021. "Five decades of research on foreign direct investment by MNEs: An overview and research agenda," Journal of Business Research, Elsevier, vol. 124(C), pages 800-812.
    15. Sarker, Bibhuti & Serieux, John, 2023. "Multilevel determinants of FDI: A regional comparative analysis," Economic Systems, Elsevier, vol. 47(3).
    16. Bei Wang & Hong Chen & Ruiqi Chen & Weiting Zeng & Lechuan Ye, 2023. "Does the Green Development of Cities Need High-Level Opening Up? A Quasi-Natural Experiment Based on China’s Pilot Free Trade Zone," Sustainability, MDPI, vol. 15(7), pages 1-20, March.
    17. Yu, Chia-Feng & Chang, Ta-Cheng & Fan, Chinn-Ping, 2007. "FDI timing: Entry cost subsidy versus tax rate reduction," Economic Modelling, Elsevier, vol. 24(2), pages 262-271, March.
    18. Bannò, Mariasole & Sgobbi, Francesca, 2010. "Firm participation in financial incentive programmes: The case of subsidies for outward internationalisation," Journal of Policy Modeling, Elsevier, vol. 32(6), pages 792-803, November.
    19. Bailey, Nicholas, 2018. "Exploring the relationship between institutional factors and FDI attractiveness: A meta-analytic review," International Business Review, Elsevier, vol. 27(1), pages 139-148.

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