Article: Macroeconomic Determinants of FDI Decisions in the Automotive Industry: Theoretical Foundations and Empirical Evidence Journal: Journal of Business and Management (JBM) 2020 Vol.26 No.2 pp.69 - 92 Abstract: Purpose : Foreign direct investment (FDI) has seen a tremendous increase over the years. Decision-making concerning FDI puts great pressure on managers due to their complexity and long-term effects on the companies. Macroeconomic factors increase in their importance when companies go international. The external environment is complex and directly influences the activities of business entities and often decides about the future progress of them. The study aims to bring more clarity into the specific macroeconomic factors and their impacts on the manager's decision-making process. Also, intervening factors will be analyzed if they may attract or distract FDI behavior. Method - Set-up of a new model by separating macroeconomic factors within certain characteristics as well as including potential intervening factors such as incentive schemes and risk/uncertainty as negative and/or positive stimulating factors for FDI decisions. Findings - The conditioned data show that some macroeconomic factors have strong influences on FDI decisions and often are not considered by the decision-makers as much as they should have been. Incentive schemes for FDI seem to have a strong positive impact on investment decision-makers. Risk/Uncertainty factors have negative impacts. Limitations - The research was conducted on the German and Austrian automotive industries with industry-specific characteristics. The period of FDI ventures was limited to 10 years. Implications - The study underlies the perception of FDI decision-makers in the specific business and environmental conditions of the automotive industry and its supplier organizations. Their views are important to consider and represent the results of this work. A vice-versa contemplation on the receiving party of FDIs may result in different findings. Originality - The study separates different macroeconomic levels concerning FDI motives to set-up a new SEM-model approach. It includes intervening factors to get a holistic view of the macroeconomic environment with potential impact on decision-making. Inderscience Publishers - linking academia, business and industry through research

Title: Macroeconomic Determinants of FDI Decisions in the Automotive Industry: Theoretical Foundations and Empirical Evidence

Authors: Helmut Birnleitner

Addresses: Author address listing can be found in the "About the Authors" section at the end of the article.

Abstract: Purpose : Foreign direct investment (FDI) has seen a tremendous increase over the years. Decision-making concerning FDI puts great pressure on managers due to their complexity and long-term effects on the companies. Macroeconomic factors increase in their importance when companies go international. The external environment is complex and directly influences the activities of business entities and often decides about the future progress of them. The study aims to bring more clarity into the specific macroeconomic factors and their impacts on the manager's decision-making process. Also, intervening factors will be analyzed if they may attract or distract FDI behavior. Method - Set-up of a new model by separating macroeconomic factors within certain characteristics as well as including potential intervening factors such as incentive schemes and risk/uncertainty as negative and/or positive stimulating factors for FDI decisions. Findings - The conditioned data show that some macroeconomic factors have strong influences on FDI decisions and often are not considered by the decision-makers as much as they should have been. Incentive schemes for FDI seem to have a strong positive impact on investment decision-makers. Risk/Uncertainty factors have negative impacts. Limitations - The research was conducted on the German and Austrian automotive industries with industry-specific characteristics. The period of FDI ventures was limited to 10 years. Implications - The study underlies the perception of FDI decision-makers in the specific business and environmental conditions of the automotive industry and its supplier organizations. Their views are important to consider and represent the results of this work. A vice-versa contemplation on the receiving party of FDIs may result in different findings. Originality - The study separates different macroeconomic levels concerning FDI motives to set-up a new SEM-model approach. It includes intervening factors to get a holistic view of the macroeconomic environment with potential impact on decision-making.

Keywords: Decision-making process; foreign direct investment; macroeconomic factors; internationalization.

DOI: 10.1504/JBM.2020.141284

Journal of Business and Management, 2020 Vol.26 No.2, pp.69 - 92

Published online: 05 Sep 2024 *

Title: Macroeconomic Determinants of FDI Decisions in the Automotive Industry: Theoretical Foundations and Empirical Evidence

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