Improving investment promotion agencies performance in attracting foreign direct investment

Abstract

PurposeThis study aims to investigate how investment promotion agencies (IPAs) attract funds effectively from emerging to established countries.Design/methodology/approachA qualitative action research (AR) study with data collected from focus groups and semi-structured interviews, observation and journaling. Comparative case studies are also presented to provide an external perspective to the researchers’ internal action researcher positions.FindingsThe research identifies four main factors that impact IPAs’ effectiveness in seeking a strategic asset in the UK from a developing country, China. The factors are policy advocacy, targeting industry, regional strategy and cultural adaption, which provide positive and significant influences on IPAs’ effectiveness.Research limitations/implicationsLittle research has been published about the roles of IPAs in attracting foreign direct investment (FDI) from a developing to a developed country. The study uses an AR approach and case studies, which have not previously been used to investigate IPAs’ performance. The study extends the sparse extant research and provides insights into what influences the performance of IPAs, thus contributing to knowledge and practice.Practical implicationsThe findings provide insights into the ways in which IPAs influence FDI flows. The research contributes to discipline knowledge and practice by identifying factors influencing funding in a non-traditional manner, that is from a developing to a developed country.Originality/valueLittle research has been published about the roles of IPAs in attracting FDI from a developing to a developed country. The study uses an AR approach and case study, which have not previously been used to investigate IPAs’ performance. The study extends the sparse extant research and provides insights into what influences the performance of IPAs, thus contributing to knowledge and practice.