Do MNEs from developed and emerging economies differ in their location choice of FDI? A 36-year review

• Published in: International business review Vol. 27; no. 5; pp. 1089 - 1103
• Main Authors: Li, Xiaoqing, Quan, Rose, Stoian, Maria-Cristina, Azar, Goudarz
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 01.10.2018
• Subjects: Emerging and developed economies; FDI; Location choice; MNE; FDI; Emerging and developed economies; MNE; Location choice
• ISSN: 0969-5931; 1873-6149
• DOI: 10.1016/j.ibusrev.2018.03.012

•DMNEs and EMNEs differ in their Location behaviour.•Factors at the individual, firm, and context levels affect the location choice (LC) of DMNEs and EMNEs but to a different extent.•An integrated approach could help capture the changing FDI landscape and better explain both DMNEs’ and EMNEs’ LC. This study examines the extent to which MNEs from developed (DMNEs) and emerging (EMNEs) economies differ in Location behaviour. Studies on MNE location choices have failed to capture the changing FDI landscape and leave the inconsistent findings unexplained. We address this gap by systematically reviewing the extant literature on location choices of DMNEs and EMNEs over the past 36 years – from the introduction of the OLI model to 2016. Key themes emerging from the review reflect a comprehensive picture, capturing the impact of multiple factors affecting location choices of DMNEs and EMNEs. Future research is challenged by: a. adopting an integrated approach examining three levels – individual (managerial), firm (ownership structure, type of FDI, internationalisation stages, and the different nature of ownership advantage), and context of location decisions (home, host, sub-national, regional, supranational, and networking); b. refining or developing theories to capture the dynamic picture of MNE internationalisation.