Abstract

http://ssrn.com/abstract=1359168
 
 

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'Near-Home Bias' in Foreign Direct Investments


Yaz Gulnur Muradoglu


Queen Mary University of London; City University London - Sir John Cass Business School

Mario Levis


City University London - Cass Business School

Kristina Vasileva


Westminster Business School

September 12, 2010


Abstract:     
While economic factors have been found to explain foreign direct investments (FDI), there is still some ambiguity regarding the decisions on the choice of destination by multinational companies. Studies find considerable evidence to suggest that distance, physical, institutional, and cultural may also play an important role in the distribution of FDI. Using the “home bias” framework from the finance literature and the gravity model we utilise a large sample of bilateral FDI data for a large sample countries, including both developed and emerging markets, to examine the impact of physical, cultural and institutional distance on foreign direct investment flows of 1,867 unique bilateral county pairs over a 25 year period. We find strong empirical evidence of persistent near-home bias in FDI outflows.

Number of Pages in PDF File: 49

Keywords: Home Bias, Foreign Direct Investment, FDI, Psychic Distance, Panel Data

JEL Classification: C33, F21, F23, O50

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Date posted: March 14, 2009 ; Last revised: May 14, 2014

Suggested Citation

Muradoglu, Yaz Gulnur and Levis, Mario and Vasileva, Kristina, 'Near-Home Bias' in Foreign Direct Investments (September 12, 2010). Available at SSRN: http://ssrn.com/abstract=1359168 or http://dx.doi.org/10.2139/ssrn.1359168

Contact Information

Yaz Gulnur Muradoglu
Queen Mary University of London ( email )
Dilke House
1 Malet Street
London, WC1E 7JN
United Kingdom
City University London - Sir John Cass Business School ( email )
106 Bunhill Row
London, EC1Y 8TZ
United Kingdom
+44 20 7040 0124 (Phone)
+44 20 7040 8853 (Fax)
Mario Levis
City University London - Cass Business School ( email )
106 Bunhill Row
London, EC1Y 8TZ
United Kingdom
4420 70408635 (Phone)
Kristina Vasileva (Contact Author)
Westminster Business School ( email )
35 Marylebone Road
London NW1 5LS
United Kingdom
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