Firm heterogeneity in modelling foreign direct investment location decisions |
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| Authors: | Simona Rasciute Eric Pentecost Ben Ferrett |
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| Institution: | 1. Division of Economics, School of Business and Economics, Loughborough University, Loughborough, LE11 3TU, UKs.rasciute@lboro.ac.uk;3. Division of Economics, School of Business and Economics, Loughborough University, Loughborough, LE11 3TU, UK |
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| Abstract: | This article investigates the probability of the FDI location decisions of multinational enterprises using a mixed logit panel data model, which is the most flexible discrete choice model. We employ a three-level data set, which includes over 1100 FDI location decisions into 13 alternative Central and Eastern European Countries (CEECs) over an 11-year period. Our empirical results on the effect of host country, industry and firm characteristics on the probability of undertaking FDI in a particular location are significant and consistent with the predictions of our theoretical model. |
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| Keywords: | mixed logit model firm heterogeneity random parameters foreign direct investment multi-level data Halton draws |
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