LOCATION DETERMINANTS OF FDI: A LITERATURE REVIEW

Abstract

The development of economic activity and the rise in foreign direct investment (FDI) in recent decades has prompted a great deal of research into the phenomenon of multinational companies. A vast amount of empirical literature on FDI catalogues a long list of determinants that try to explain direct investment by multinational companies in a particular location, but it is noticeable that the results are not always consensual. This article provides a review of the theoretical approaches to and empirical studies on FDI in an attempt to single out the most robust factors for explaining the geographic distribution of FDI flows worldwide. It also suggests paths for future research in this area.