Multinational Enterprises and Investment Motivations: A Strategic Analysis of Inward Foreign Direct Investment into Ireland. / Annan-Diab, Fatima.

2012. 353 p.

Research output: ThesisDoctoral Thesis

Unpublished

Abstract

From both a firm and country perspective understanding the nature of multinational investment decisions is an important topic in understanding the contribution it makes to the economic growth, development of national prosperity and wealth creation of individual countries. The corporate decision as to where to invest, the resources and core competences to commit to each location is crucial for the creation of a firm’s sustainable competitive advantage. Understanding the process of corporate investment decisions contributes to generating effective managerial recommendations to be adopted by multinational enterprises and to generating appropriate economic policies for host countries to enhance their attractiveness as investment destinations.

The objective of this thesis is to develop a conceptual framework that provides insights into the strategic decision-making behaviour of multinational firms. It seeks to advance the understanding of the link between multinationals' foreign direct investment behaviour and location-specific considerations, which influence their ultimate investment decisions. The underlying assumption of this research is that in a changing global economy, resources and core competences of the multinational firm drive its decision making process with respect to international investment; furthermore multinational investment decisions are influenced by the changes in the environment of the host country.

The notion that the manner in which a firm utilises its resources contributes to the development of its core competences directly influences its strategic and investment decisions. As a consequence, firms must examine and understand the resources and capabilities that enable them to generate above-normal ‘rates of return’; this process will help the organisation to compete in the most effective manner in dynamic global markets.

This research adopts a resource-based view with relevant key insights drawn from International business theory to understand multinational foreign direct investment decisions and motivations. The development of a theoretical framework for multinational investment motivations bridges the resource-based view and international business literature; additionally it addresses a key challenge for the two literatures by reducing fragmentation and synthesising different theoretical perspectives.

To achieve the objective of this thesis, Ireland was chosen as a subject for study. An in-depth investigation of 98 multinational firms who have undertaken investment in Ireland between 2003-2009 was undertaken. These firms were chosen on the basis that they had disclosed the motivation for their decision to undertake this investment.

The rationale for choosing Ireland was based upon the fact that the country achieved rapid transition from a ‘developing’ to a ‘developed’ economy, with foreign direct investment contributing significantly to this.

In broad terms the contributions and key findings of this work can be summarised as:

(i) Establishing the pivotal role for firm’s resources, capabilities and core competences in driving firms' investment motivations;
(ii) Identification of which resources, capabilities and core competences are associated with specific investment decisions and the locational characteristics, which make them valuable. These are empirically validated through the application of the resource-based view theory in the Irish business environment and industry context;
(iii) The identification of specific linkages between firms’ motivations and firms’ resources, and how the foreign direct investment motivations of multinationals relate to the external environment of the host country;
(iv) The identification of the fact that some of the firms, who invested in Ireland, exhibited more than one motivation for undertaking their investment;
(v) The identification, by making context specific, of firms’ resources, capabilities and core competences that are associated with multinationals’ decisions to invest in Ireland.

Original languageEnglish
QualificationPh.D.
Awarding Institution
Supervisors/Advisors
Award date1 Jul 2012
Publication statusUnpublished - 8 Jun 2012
This open access research output is licenced under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

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