Foreign direct investment in the hospitality industry in Iceland and Norway, in comparison to the Nordics and a range of other OECD countries

Abstract

ABSTRACTInternational hospitality investment is a key indicator of tourism's growing importance, and the question is what drives the investment. This research compares Iceland and Norway to the Nordic countries, and a range of OECD countries. The research establishes through econometric modeling how foreign direct investment in the hospitality industry is driven by factors such as economic and market size of the headquarters home country, value added tax increase, and skilled labor of the headquarters home country, compared to that of the host country. Increased understanding on the determining factors of this growth from a range of available metrics will inform tourism management both from an entrepreneurial and public policy perspective. The paper concludes by outlining how and which factors should be monitored in order to guide investment in the hospitality industry of rapidly emerging destinations.