- Title
- Foreign direct investment in conflict locations: an analysis of firm behaviour & host nation development
- Creator
- Hickson, Josiah
- Relation
- Newcastle Business School Student Journal Vol. 1, Issue 1, p. 10-26
- Publisher
- University of Newcastle
- Resource Type
- journal article
- Date
- 2017
- Description
- Foreign Direct Investment (FDI) is defined by the UNCTAD as ‘an investment made to acquire a lasting interest in enterprises operating outside of the economy of the investor’ (UNCTAD, 2016). The advent of globalisation and the global value chain has elevated the prominence of FDI, both in academia and for business decision-making. Multinational corporations (MNCs) are increasingly engaged in FDI activities to non-traditional markets as a source of greater profitability. This research paper focuses on FDI activities to conflict locations that are characterised by a high degree of political and geopolitical instability. Specifically, this paper provides an investigation into the benefits accruing to MNCs engaging in FDI to conflict zones, the impacts of firm governance structures on the FDI decision, and the impacts of FDI for the host nation. This paper argues that FDI activities should ideally be mutually beneficial for MNCs and their stakeholders, and encourage further economic and social development in the host nation. This paper extends the existing international business and economics literature and provides a greater understanding of the motivations and impacts of MNC FDI activities. It highlights that FDI decisions to conflict locations are often primarily driven by a firm’s economic responsibilities and occur where corporate governance structures allows a firm to engage in unethical behaviour to exploit the weak institutional framework of the host nation. In contrast to this current behaviour, this paper argues that firms should adopt an integrated strategy framework and promote stronger corporate governance mechanisms in order to maximise their rewards from FDI whilst maintaining the social interests of all stakeholders and contributing to host nation development.
- Subject
- conflict; corporate social responsibility; eclectic paradigm; economic develeopment; foreign direct investment; stakeholders; Newcastle Business School Student Journal
- Identifier
- http://hdl.handle.net/1959.13/1467348
- Identifier
- uon:47807
- Identifier
- ISSN:2207-3868
- Rights
- © 2017 The Author. This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by-nc-nd/4.0/.
- Language
- eng
- Full Text
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