Abstract
The purpose of this paper is to empirically investigate how ownership-specific, location-specific, internalization and strategic advantages have influenced the location strategies of Finnish firms in 10 South and Southeast Asian countries from 1980 to 2000. Despite the increased interest in foreign direct investments (FDIs), very few studies have been undertaken to empirically analyse influential ownership-specific, location-specific and internalization (OLI) variables together with strategic advantages in order to assess FDI decision-making among foreign investors. To the best of our knowledge, strategic motives particularly have remained primarily anecdotal. This paper is apparently the first attempt to analyse how the above OLI advantages have influenced Finnish manufacturing firms in Asian countries. The research results indicate that large parent firm size, large international experience, large market size in the target country, low cultural distance and low wage rates increase the probability of market-seeking and efficiency-seeking FDIs. It has also been found that low levels of inflation, low levels of risk and a high level of exchange rate fluctuation in the target country increase the probability of risk-reduction seeking FDIs. Finally, the results show that high R&D intensity in the parent firm increases the probability of knowledge-seeking FDIs in Asian countries.
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Tahir, R., Larimo, J. Understanding the Strategic Motivations of Finnish Manufacturing FDIs in Emerging Asian Economies. Asian Bus Manage 4, 293–313 (2005). https://doi.org/10.1057/palgrave.abm.9200133
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DOI: https://doi.org/10.1057/palgrave.abm.9200133