An analysis of firm-specific resources and foreign direct investment in the United States

Abstract

This firm-specific analysis of foreign direct investment in the United States is guided by linking the resource-based view of the firm with control variables from international business theory. Specifically, we develop a multivariate regression model based on firm-specific resources that help explain firms’ foreign direct investment in the United States. This time-series, cross-sectional study utilizes an original database of more than 50 multinational enterprises and comprises complete FDI activity over a fifteen-year period; survey data were obtained directly from the company affiliates themselves. The firms demonstrate increased propensity for FDI when they are more technology intensive, when their managers have more international experience, and when they are more profitable, controlling for firm size, financial leverage, prior global expansion, and home-country currency variation.