A Review of the Empirical Literature on FDI Determinants

This paper surveys the recent burgeoning literature that empirically examines the foreign direct investment (FDI) decisions of multinational enterprises (MNEs) and the resulting aggregate location of FDI across the world. The contribution of the paper is to evaluate what we can say with relative confidence about FDI as a profession, given the evidence, and what we cannot have much confidence in at this point. Suggestions are made for future research directions. This paper was written for an International Atlantic Economic Society session at the 2005 ASSA conference in Philadelphia, PA. I thank Ron Davies, Walid Hejazi, and an anonymous referee for excellent comments and suggestions. All remaining errors are my own.