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A Literature Review on the Relationship Between Motives Of FDI and Subsidiary Performance


Affiliations
1 Assistant Professor, School of Management & Business Studies, Jamia Hamdard, New Delhi., India
2 Associate Professor, Dept. of Business Administration, Faculty of Management Studies & Research, Aligarh Muslim University, Aligarh., India
3 Director, Global Business Consultants, Ex-Professor, IIFT, New Delhi., India
     

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The location choice of foreign direct investment by multinational corporations has been the subject of academic discourse in international business. Given the importance of FDI to firms and policy-makers, this paper seeks to identify the factors that determine the FDI flow in different countries worldwide from 1967-2018. The paper presents the findings by outlining the theoretical framework of FDI and underlying motives of foreign investment. The discussion is then directed towards an overview of studies based on different motives of FDI viz., resource, market, strategic-asset and efficiency related and anticipated performance benefits of FDI. The general discussion on studies based on different investment motives enabled the researcher to outline and explain important constructs of the study. The paper based on literature review further established an explicit relationship between investment motives of FDI and subsidiary performance.

Keywords

Foreign direct investment, FDI motives, Multinational corporations, Subsidiary performance, Internalization advantages, Services FDI, Manufacturing FDI.
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  • A Literature Review on the Relationship Between Motives Of FDI and Subsidiary Performance

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Authors

Alka Sanjeev
Assistant Professor, School of Management & Business Studies, Jamia Hamdard, New Delhi., India
Mohd Afaq Khan
Associate Professor, Dept. of Business Administration, Faculty of Management Studies & Research, Aligarh Muslim University, Aligarh., India
R. K. Wadhwa
Director, Global Business Consultants, Ex-Professor, IIFT, New Delhi., India

Abstract


The location choice of foreign direct investment by multinational corporations has been the subject of academic discourse in international business. Given the importance of FDI to firms and policy-makers, this paper seeks to identify the factors that determine the FDI flow in different countries worldwide from 1967-2018. The paper presents the findings by outlining the theoretical framework of FDI and underlying motives of foreign investment. The discussion is then directed towards an overview of studies based on different motives of FDI viz., resource, market, strategic-asset and efficiency related and anticipated performance benefits of FDI. The general discussion on studies based on different investment motives enabled the researcher to outline and explain important constructs of the study. The paper based on literature review further established an explicit relationship between investment motives of FDI and subsidiary performance.

Keywords


Foreign direct investment, FDI motives, Multinational corporations, Subsidiary performance, Internalization advantages, Services FDI, Manufacturing FDI.

References