Determinants of the Effectiveness of Foreign Direct Investments – A Review Article Cover Image

Determinanty efektywności zagranicznych inwestycji bezpośrednich… – przegląd wyników badań
Determinants of the Effectiveness of Foreign Direct Investments – A Review Article

Author(s): Marian Gorynia, Piotr Trąpczyński
Subject(s): Business Economy / Management, International relations/trade, Policy, planning, forecast and speculation, Economic development
Published by: Instytut Nauk Ekonomicznych Polskiej Akademii Nauk
Keywords: foreign direct investment (FDI); effectiveness; internationalism of enterprises;

Summary/Abstract: The aim of the paper is to identify key determinants of the effectiveness of foreign direct investments as an advanced form of foreign expansion of enterprises. The authors give a comparative review of the findings of various empirical studies made hitherto, which were devoted to the analysis of the results achieved by foreign subsidiaries created by FDI. They distinguish four group of factors affecting effectiveness: the form of FDI, resource conditions, characteristics of host countries, and the strategy performed by the mother enterprise. The analysis of the results of the research available in the existing literature indicates that individual determinants may influence quite differently various dimensions of the FDI effectiveness, such as rentability, productivity, sales increase, exports, market share, and the ability of the subsidiary to survive. Even if such factors affecting effectiveness as the form of FDI, size of the investing enterprise, its experience in the host country, and the subsidiary’s age have been often analysed, their impact on the various dimensions of the FDI effectiveness differs between various studies. Future research on the subject should try to combine the assessment of the effectiveness of foreign subsidiaries and their mother companies, with special consideration of the effect of FDI on the effectiveness of the investing enterprise.

  • Issue Year: 2014
  • Issue No: 5
  • Page Range: 663-684
  • Page Count: 22
  • Language: Polish
Toggle Accessibility Mode