Foreign Direct Investment – Regional Science Inquiry

MARIUSZ E. SOKOŁOWICZ

Department of Regional Economics and Environment, University of Łódź

90-014 Łódź, ul. Rewolucji 1905 r. no. 39

Ph. D., Assistant Professor, University of Łódź, Poland

sokol@uni.lodz.pl; http://www.region.uni.lodz.pl/Mariusz_Sokolowicz.html

Abstract:

This paper depicts the level of international capital flows attractiveness in Łódź Metropolitan Area in Poland and identifies the key attractiveness’ factors in the context of potential (or only hypothetical?) features that can decide about embeddedness of large, foreign capital-owned companies. From the point of view of the every territory’s aspiration to build its long-term competitive advantage, it is worth considering whether it is better for a region to be a “container” of cost-minimizing resources for foreign capital-owned enterprises or to offer a well developed environment, enhancing the innovative potential of both territory and its companies. A questionnaire-based research among foreign capital-owned companies having their subsidiaries located in the Łódź Metropolitan Area and employing more than 50 workers, has been conducted. It has revealed that among FDI location factors in this territory, cost factors definitely prevail. At the same time, one can observe relatively low importance of pro-efficiency location factors (except some elements of local educational offer), which could determine the potential for innovativeness of regional economy. Therefore, in Łódź Metropolitan Area and probably in most of other Polish regions, a change of the character of pro-investment policy should be considered. This “policy switch” shall be directed towards building more efficient environment for stronger economic ties at the regional level. This also means a need of strengthening the institutional framework for innovation by human resources’ development or development of research capacities of the public sector, which seems to be the most important aim for creating a potential for an effective “marriage” of global R&D network of TNCs with regional innovation system.

University of Azores

Abstract:

In response to a survey of Fortune 1000 companies enquiring in 2007 about “the biggest barrier in doing business in the world market”, cultural differences ranked at the top of the list. For a long time culture and economy have been treated as broadly independent areas of research The gap to recognize cultural differences was the most common cause of failure for cross-national enterprises. Members of different cultures express different values and priorities when they make and implement decisions. This article seeks to measure the influence of factors such as history, language and culture in foreign direct investment (FDI) of Brazilian companies in Portugal, two countries with deep cultural affinity. Brazil is an emerging country that is increasing your importance as international investor. Firstly, we will describe the increase importance of emerging countries in the world economy, Brazil as international investor and the luso-Brazilian economic relations, especially after 1990s. Secondly, it will take surveys and assesses approaches to explain a multidimensional analysis of the FDI, in particular those related to culture. After that, through a regression analysis based on interviews answered by Brazilian companies in Portugal, we measure by a regression model the influence of the Uppsala School, or Scandinavian, which postulates the importance of culture in corporate investment abroad. While geographic, political and economic approaches have own advantages of their own, the cultural area is particularly useful for a long-term comparative economic analysis.
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Keywords: cultural affinity – enterprises – Foreign Direct Investment – Brazil – Portugal – emerging countries – Stepwise method – Eclectic theory – Scandinavian Theory