Destination For Foreign Direct Investment Research Articles

Factors Influencing Foreign Direct Investments Inflow in Africa: A Case Study of Tanzania

Africa has emerged as an attractive destination for foreign direct investment (FDI) due to its rich natural resources, growing economies, and increasing political stability. The doors of Tanzania, one of the largest countries in Africa, have been opened to international companies in search of growing markets. Nevertheless, Tanzania has seen a low level of foreign direct investment (FDI) inflows, primarily because of its stringent policies restricting the ownership of businesses by foreign nationals. The aim of this study is to identify and explain the factors that influence FDI inflows in Tanzania, which is the country that will be the focus of the study. This study will concentrate on the independent factors of political stability, availability of natural resources, size of the economy, and transport infrastructure, as well as the dependent variable of foreign direct investment (FDI). To collect the appropriate information, five survey questions were developed for each variable. A total of 125 respondents were collected using purposive sampling. The findings of this study will inform policymakers, investors, and other stakeholders in the region about the factors that influence foreign direct investment inflows into Tanzania. The study examined the impact of transport and infrastructure, political stability, the scale of the economy, and the availability of natural resources on foreign direct investment (FDI) in Tanzania.

Attractiveness of Albania for Foreign Firms: An Analysis of Opportunities and Challenges

This paper examines Albania’s evolving landscape as a burgeoning destination for foreign direct investment (FDI), underscored by its strategic geographical location, economic reforms, and sectoral growth opportunities. Using a literature review methodology, we focus into an analysis of peer-reviewed articles, government reports, and international indices to construct a nuanced understanding of Albania’s economic environment, the palpable sectoral opportunities for investment, and the persistent challenges that foreign firms may encounter. This analysis reveals that Albania presents a compelling case for foreign investment, particularly in sectors like tourism, energy, agriculture, and manufacturing. Conversely, the investigation highlights significant challenges that could impede foreign investment, such as bureaucratic inefficiencies, corruption, infrastructural deficits, and legal and regulatory uncertainties. This study contributes to the broader discourse on FDI in emerging markets, offering insights into Albania’s unique position within the Western Balkans region and providing a framework for policymakers and investors to harness the full spectrum of opportunities while addressing the challenges to ensure mutual long-term benefits.
 
 Received: 19 February 2024 / Accepted: 15 March 2024 / Published: 23 March 2024

Dynamics of FDI Inflow on Indian Economy- A Brief Overview

In this article, the focus is on investigating the influence of foreign direct investment (FDI) on the economic growth of India following the economic reforms of 1991. Additionally, the challenges that India has encountered in positioning itself as an attractive destination for FDI in the global market are also analyzed. The study also investigates the year-wise and sector-wise flow of FDI between 2001 and 2021 to observe the dynamic patterns of FDI inflow in the country. Furthermore, the paper provides key policy implications and highlights the complexities surrounding FDI in India India has become a popular destination for foreign investors due to its market potential and liberalized policy regime, despite being a latecomer in the FDI scene compared to other East Asian countries. Since the economic reform of 1991, FDI in India has experienced a positive growth rate, with the government continuously focusing on liberalizing policies towards FDI. FDI has been a significant driver for India's economic growth, enabling the country to achieve financial strength, stability, growth and development to sustain and compete in the global economy. The study indicates that FDI growth effects vary across sectors, with the services sector promoting growth in the manufacturing sector through cross-sector spillovers. FDI is indeed indispensable considered for India's economic growth and a positive association exists between FDI and GDP.

Pros and Cons of Ghana as a Destination for Foreign Direct Investment

This study presents an in-depth analysis of foreign direct investments (FDI) determinants in Ghana. Following the typology of Dunning’s motives of FDI location, they are categorised under the resource-seeking, market-seeking or efficiency-seeking FDI they foster. Literature on FDI drivers in Africa was considered and based on the tendency and/or comparison of the most recent official data (2000-2022), the pros and cons of such determinants were identified. The analysis reveals that Ghana presents a mostly favourable profile to attract resource-seeking and market-seeking FDI but a mixed situation in the determinants of efficiency-seeking FDI. This study adds to the FDI literature by categorising the drivers under Dunning’s motives of FDI and studying the evolution of these factors in a specific developing African country (Ghana) in order to reveal the country’s performance with the determinants. Results show that Ghana’s trend is very positive and can become an attractive market for foreign companies. And government and policymakers should continue in the trend of improving their factors to attract and retain foreign investment.

Understanding the Relationship Between Foreign Direct Investment and Economic Growth in BRICS: Panel ARDL Approach

Foreign direct investment (FDI) has gained prominence in international economics over the past three decades. Primarily, the belief that FDI influences economic growth of the host country, set the stage for the empirical research focused on the FDI–growth nexus. The growth literature, however, reveals mixed evidence regarding the role of FDI in promoting growth. Despite the conflicting evidence, developed and developing economies have attached immense economic and political importance to FDI. It is noteworthy that BRICS (Brazil, Russia, India, China and South Africa) economies are representative developing economies and have emerged as significant FDI destinations, having witnessed an immense surge in inward FDI over the past few decades. It is against this backdrop that the present study attempts to assess the impact of FDI inflows and select macroeconomic variables, namely macroeconomic stability, human capital, financial development and trade openness (TO), on the economic growth of developing BRICS economies. The study examines both short-run and long-run relationships between FDI inflows, select macroeconomic variables and economic growth by employing the dynamic panel autoregressive distributed lag (ARDL) model, unlike most of the previous studies. For this study, secondary data covering a reference period of 32 years (1987–2018) were used. The data on GDP growth (GDPG), FDI inflows, inflation (INF), human capital, private sector bank credit (proxy for financial development) and TO have been collected from the World Investment Reports published annually by United Nations Conference on Trade and Development (UNCTAD) and World Bank (World Development Indicators). The findings revealed a long-run cointegration among FDI, host country characteristics (TO, human capital, financial development and macroeconomic stability) and economic growth in BRICS.

An Empirical Study Identifying the Most Favored Foreign Direct Investment Inflows Destination in the Gulf Cooperation Council Countries

This study aims to identify the most favored foreign direct investment destination in the Gulf Cooperation Council countries. The study compares the global rankings of each GCC country on investment decision parameters: market size, economic growth, infrastructure, technology adoption, innovation friendliness, productive and diversified labor force, financial infrastructure, taxation, political risk, corruption, and ease of doing business. This study confirms that the UAE is the most favored FDI destination in the GCC. Moreover, the current policies and regulations promulgated indicate the country's intent to become more investor-friendly and attractive to live in.

A Multi-Sectoral Analysis of Effects of Foreign Direct Investment on Nigeria’s Output Growth

This research work examined the Multi-Sectoral Analysis of effects of Foreign Direct Investment on Nigeria’s Output Growth ranging from 1990-2020, covering a period of 30 years. Foreign Direct Investment (FDI) is undoubtedly a key source of external capital to many emerging economies. Nigeria is one of the renowned destinations for FDI in Africa. Inflows of FDI in Nigeria are not significant when compared to some other developing countries. This research explores issues pertaining to sectoral allocation of FDI in the major sectors of the Nigerian economy. Technically, it focused on the effect of FDI on Nigeria’s sectoral output growth. Foreign Direct Investment Proxied as FDI is the explanatory variable while Interest Rate proxied as INTR and Exchange Rate as EXR are the control variables while Mining & Quarrying (MQGDP), Manufacturing & Processing (MPGDP), Agricultural Sector (AGGDP), Information & Communication (ICGDP) Output are the dependent variables. The central objective of this research work is to determine the effect of FDI inflows, on Mining & Quarrying (MQGDP), Manufacturing & Processing (MPGDP), Agricultural Sector (AGGDP), Information& Communication (ICGDP) Output and also Interest Rate and Exchange Rate as control Variables. It employed the use of secondary and time series data using statistical tool such as Auto Regressive Distributive Lag (ARDL), Augmented Dickey Fuller unit root to test for the stationarity of the Data, Johanson Co-integration to test for long-run equilibrium relationship that exist among the variables under study. The p.value of FDI on MQGDP, MPGDP, AGGDP, ICGDP are 0.3767, 0.5846, 0.3155, 0.8498and effect of INTR on MQGDP, MPGDP, AGGDP, ICGDP are 0.8015, 0.7097, 0.9200, 0.8426 and effect of EXR on MQGDP, MPGDP, AGGDP, ICGDP are 0.4172, 0.9330, 0.5513, 0.1755 respectively showing that none is significant. The result shows that FDI, INTR &EXR impacted positively on the output growth of MQGDP, AGGDP & ICGDP while, only FDI impacted positively on MPGDP with INTR & EXR exerting negative effect on it. Based on the findings, the study recommends amongst others that government should encourage the inflow of more FDI into the various sectors by creating an enabling environment and formulating strategic socio-economic policies that will enhance the ease of doing business in Nigeria and boost investor’s confidence.

SCENARIO OF FOREIGN DIRECT INVESTMENT IN INDIA DURING COVID-19

Foreign Direct Investment (FDI) is cited as one of the most strategic tools for a developing economy as it brings in market discipline by increasing competition. In addition, there is a growing demand for products and services that are available across the world. Due to India’s increasing working population with higher purchasing power there is an increasing demand for products and services that are best in class. The covid-19 pandemic has set the international financial system into a downturn which means the global economy has begun shrinking whereas India has no exemption. Nowadays India has emerged as one of the most preferred destination for FDI. The covid-19 pandemic has put international investor confidence in India to the test. The basic aim of the study is to examine the effect of Covid-19 in Foreign Direct Investment in India. The trends of FDI inflows have been monitored to compare pre and post Covid-19 period. The results reveal in 2020 has worst effect, while after that, due the revised FDI policy and India’s internal capability to attract international investors, increase in FDI inflows have been observed. FDI is considered as a positive factor of the economic expansion could play a key part in assisting the economy in the time of crisis. KEYWORDS: Foreign Direct Investment, Covid-19 pandemic

More than just investment: Causality analysis between foreign direct investment and economic growth

This study examines the causal nexus between Foreign Direct Investment (FDI) and the economic growth of seven (7) regions encompassing 117 countries. A more recent panel dataset over the period 2010-2020 was analysed using the Granger causality approach and panel VAR/block exogeneity test to conduct predictive analysis among the panel series. Wavelet coherence techniques too were adapted in bringing novelty and further justifications to the research in exploring the interaction effects of the variables, which are yet to be popularised in the studied discipline. The empirical results indicate the presence of bi-directional causality between FDI and economic growth globally and in the Asian region. In contrast, the causality is uni-directional in the American region. A non-directional causality was discovered in European, Oceanian, Mediterranean, and African regions, and the findings were consistent with the outcome of the wavelet coherence technique results. The study further classifies the regions into three cross-market categories such as developed, emerging and frontier markets. The results imply no causality for most developed and emerging economies in the regional analysis. Findings also provide insights for governments and policymakers worldwide to formulate policies on directing FDI flows and propositions for a host country to become a more conducive destination for FDI and accelerate economic growth.

COUNTRY REGULATORY ENVIRONMENT, MODERATING COUNTRY BRAND CHOICE FOR FOREIGN DIRECT INVESTMENT IN KENYA

Choice to locate business internationally is determined by comparison of various countries. The decision to invest may be based on market size, natural and human resources, financial, physical and technological infrastructure, country openness to foreign investment, institutional frameworks and policies such as fair trade, transparency. Countries are now competing to be a favourable destination for foreign direct investment. This has led to country making changes in policicies in order to attract investors. The Kenya investment legislation framework is anchored in Investment Promotion Act (IPA) of 2004. Kenya Investment Authority facilitates both local and foreign investors to obtain licences, permits and certificates. Despite Kenya making chnges on regulatory environment in 2014 based on on UNCTAD (2013) policy recommendations by establishing a one stop shop at Kenya Investment Authority to market and facilitate both local and foreign investors, investors chose Ethiopia over Kenya and Ethiopia remained the largest recipient of FDI in East Africa. Foreign Direct Investment (FDI) inflows in Kenya declined by 18% in the year 2019, This implied that Kenya was losing its competitiveness in attracting foreign direct investment. This study focused on the Kenya investment policy review recommendations by UNCTAD (2013). It measured the extent to which six policies (tax policy, competition policy, governance policy, environment policy, infrastructure and human capital policy) are moderating the relationship between country marketing mix and country brand choice for FDI. Findings indicated that both country marketing mix and country regulatory environment are statistically significant. The interaction term between country marketing mix and country regulatory environment is significant, with a negative B coefficient. This indicated that unfavourable regulatory environment moderates the effect of marketing negatively. An increase in unfavourable environment will result in the decrease of the likelihood that a country will be chosen of foreign direct investment. The study concluded that an increase in favourable country regulatory environment results in an increase in likelihood that an investor will choose a country for Foreign Direct Investment (FDI). Therefore, the study concluded that there is a statistically significant relationship between country regulatory environment and country brand choice, and that country regulatory environment has a significant moderating effect on the relationship between country marketing mix and country brand choice for foreign direct investment in Kenya. Unfavourable regulatory environment moderates the effect of marketing efforts negatively. An increase in unfavourable environment will result in the decrease of the likelihood that a country will be chosen of foreign direct investment.

Dynamic capabilities and FDI in conflict zones: the role of diversification and stock management capabilities

PurposeDespite the increased level of national conflict around the world, outward foreign direct investment (FDI) targeting these areas has increased. This study aims to adopt a dynamic capability lens to examine the relationship between firm capabilities and the level of conflict in their FDI portfolio. The paper argues that conflict zones may be an attractive destination for a subset of firms, given their capability profile.Design/methodology/approachThe authors draw from a sample of US Fortune 500 firms (2019) to examine their FDI destinations; specifically, they collected data on the locations of their foreign subsidiaries, which resulted into a final sample of 118 diversified US firms. The model was analyzed using ordinary least squares multiple regression to predict the extent to which their FDI portfolios have ongoing domestic and international conflict and the impact of expansion in such conflict-stricken markets on firm financial performance (ROA).FindingsThe authors find that firms with greater international geographical diversification capabilities, as depicted by their geographic spread, and those with greater local stock management capability, as depicted by their initial public offering maturity, are more likely to launch subsidiaries in high ongoing conflict zones. Furthermore, the authors find that while it may be unprofitable for firms to seek FDI in high-conflict zones, firms that operate in strategic industries (manufacturing, infrastructure, natural resource extraction) experienced positive performance. This can be attributed to the fact that firms operating in these sectors are more likely to directly profit in the reconstruction/rebuilding of such conflict-stricken markets.Originality/valueWhile previous literature focused on macro-level factors, this study sought to highlight firm-level factors that determine FDI decision in conflict zones. The authors capture different dimensions/sources of firms’ dynamic capability, one resulting from foreign experience (i.e. geographic diversification) and the other from local experience (i.e. domestic stock management) to assess how each correlate with multinational corporations’ level of conflict in their FDI portfolio. Furthermore, the authors contribute to the understanding of the relationship between expansion in conflict zones and firm performance and highlight that industry does matter. Implications from this study highlight the importance of building risk management capabilities to handle not just expansion in conflict zones but also during challenging times like those brought about by pandemics.

Effect of Land Marketization Level and Land Prices on Foreign Direct Investment in China

With the increase in China’s land marketization level, the fundamental role of pricing mechanisms in optimizing the allocation of land resources has received greater attention and has affected foreign direct investment (FDI). This paper analyzes the effects of land marketization level and land prices on FDI using a mediation model based on data on primary land market transactions in 256 cities from 2003 to 2019. The results indicate that the land marketization level, land prices, and FDI are all increasing, with regional heterogeneity. Compared with low-level cities, the land marketization level and land prices in high-level cities have increased the most. Low-level cities have become new hotspots for FDI, whereas high-level cities remain the main destinations for FDI. Both land marketization levels and land prices significantly promote FDI. Land marketization level exerts a weak direct positive effect on FDI in high-level cities but a strong indirect positive effect on FDI in high-level cities through land prices in general. The results of this study enrich the literature on the location decisions of multinational corporations and may serve as a reference for China and other developing countries in developing policies to attract FDI.

Global cities and multilatinas: the search for global cities-specific advantages, establishment and ownership entry modes

PurposeThis paper aims to study the internationalization path of emerging market multinational enterprises (EMNEs) in their international expansion through the global cities (GCs) phenomenon.Design/methodology/approachThe authors used a quantitative approach to identify the most used ownership and entry modes, the preferred economic sectors and the level of interconnectedness of GCs.FindingsThe manuscript identified the predominance of the tertiary sector in the selection of GCs as foreign direct investment destinations. Second, the acquisition is the preferred entry mode regardless of the connectivity of the GC and the country of origin of the EMNE. The third is the use of wholly-owned subsidiaries as the preferred ownership mode. Finally, market-seeking is the main driver for the internationalization of Latin American EMNE. Consequentially, some GCs-specific advantages remain untapped by Latin American EMNE.Research limitations/implicationsThis manuscript considered each investment into a global city as a single step, although some acquisitions occurred incrementally through several small investments.Practical implicationsThe authors developed a road map for the internationalization of Latin American EMNEs through GCs, acquisitions and wholly-owned subsidiaries. Finally, service-oriented EMNEs, such as IT and financial services, target locations with high interconnectedness to maximize the benefits of GCs-specific advantages.Originality/valueThe authors pointed out that market-seeking, not resource-seeking or efficiency-seeking is the primary driver of the internationalization of EMNE into global cities.

The Role of Economic Infrastructure and Trade Openness in Attracting Foreign Direct Investment in Developing Countries

The purpose of this paper was to examine the role of economic infrastructure and trade openness in attracting foreign direct investment in developing countries. The study used secondary data from 1997 to 2019 to analyse 95 developing countries selected as per data availability. Pooled regression was performed on the panel data using E-views computer software. The method used was fixed effect model and the two-stage estimated generalized least squares estimation with cross-section weights and instrumental variables. The paper tested seven equations for robustness and results analysed after cointegrating regression Durbin-Watson test. The study tested the significance of economic infrastructure and degree of trade openness in the attraction of foreign direct investment inflows among other variables. The study established a positive and significant correlation between foreign direct investment inflows and economic infrastructure. The paper also established a positive and significant correlation between foreign direct investment inflows and the degree of trade openness. The study concluded that better economic infrastructure and increased trade openness individually results in increased foreign direct investment inflows. Unequivocally therefore, this paper showed that countries with good economic infrastructure will drastically reduce transport cost. With good infrastructure in place, increased degree of trade openness will lead to a greater marginal gain in foreign direct investment inflows. Consequently, empirical results showed that, economic infrastructure and trade openness interact. This interaction makes a given developing country more attractive as a foreign direct investment destination. Unambiguously, this study found a negative interaction between economic infrastructure and the degree of trade openness, inferring that the most economically advanced developing countries tend to attract higher foreign direct investment inflows but at a decreasing rate compared to the least economically advanced developing countries.

Foreign Direct Investment and the Profit Rate: Empirical Evidence from the European Union

This article aims to explain recent trends of foreign direct investment (FDI) in the developed world, and specifically in the case of the European Union (EU). It includes an empirical analysis of FDI in two distinct EU country groups and finds that the profit rate plays a significant role in determining FDI patterns. It is shown that relatively less developed Eastern EU members have a higher profit rate and thus have established themselves as an attractive FDI destination within the EU. Additional factors that influence FDI are market size, long-term FDI attractiveness, and trade protectionism. Finally, a sectoral analysis of FDI and trade shows that increased FDI in less developed Eastern EU members is mainly of an export-oriented type. JEL Classification: F14, F15, F21, P16

Absorptive capacities, FDI and economic growth in a developing economy: a study in the Indian context

PurposeThe purpose of the study is to examine the moderating impact of absorptive capacity on the foreign direct investment (FDI)–growth link using the data for the period 1995–2019.Design/methodology/approachThe authors apply the autoregressive distributed lag (ARDL) model and threshold analysis for empirical analysis.FindingsThe findings indicate that the link between FDI and economic growth is influenced indirectly by absorptive capacities, such as financial development, institutional quality, technological capability, and trade openness. However, while examining the linear FDI–growth nexus, the authors noticed that human capital and infrastructure did not affect the relationship; when the non-linearity in the link is considered, the authors noted that all absorptive capacities (including human capital and infrastructure), when interacted with FDI, have a positive effect on growth. Furthermore, FDI stimulates growth if the absorptive capacities have exceeded a certain threshold level.Research limitations/implicationsFrom a practical standpoint, it is reasonable to conclude that improving absorptive capacities is critical in order to perceive FDI as a growth driver.Originality/valueIndia has been able to position itself as a preferred destination for FDI (when the major economies are facing a sharp decline in FDI inflows) despite the Covid-19 pandemic. However, it still suffers from low growth. Although much of the literature admits that absorptive capacity is crucial for FDI to promote growth, no study in the case of India examines FDI–growth nexus conditioned upon absorptive capacity. Moreover, the authors have used threshold analysis for assessing the non-linearities in FDI–growth nexus contingent on absorptive capacity.

Does it matter where you invest? The impact of foreign direct investments on domestic job creation and destruction

AbstractThis study examines how foreign direct investment (FDI) affects domestic employment by using unique division‐level data of Japanese firms. Contrary to most previous studies focusing on the effect of FDI on net employment growth, we decompose it into job creation (JC) and job destruction (JD) for each individual firm. We find that FDI destination plays an important role: FDI to Asia increases JC, whereas FDI to Europe/North America decreases it; furthermore JD decreases, regardless of FDI destination. A frictional search‐and‐matching model with heterogeneous jobs can explain the differential effects. The model provides additional predictions on JC and JD by job type, which are also empirically confirmed.

Major Shifts in Sustainable Consumer Behavior in Romania and Retailers’ Priorities in Agilely Adapting to It

The sustainable consumption and integration of digital solutions with respect to sustainable consumption have been encouraged by the new European circular economy action plan. Digital adoption has been accelerated by the COVID-19 pandemic; companies have been challenged to rapidly adapt to the constant evolution of consumer needs and expectations, leading to valuable insights into the advancement of green business practices and a consequent rethinking of their business model. The purpose of this paper is to investigate the major shifts in sustainable consumer behavior on the Romanian retail market within the context of the Green European Deal, and retailers’ priorities in agilely adapting to these significant evolutions. Based on a comprehensive literature review on these major shifts and significant evolutions at the national and international levels, a quantitative study was carried out to evaluate the Romanian retail market and identify the major challenges faced by retailers in dealing with the new set of priorities. The data collection was conducted via a survey used in the retail environment, applied within a Romanian supermarket chain. The Romanian retail sector has a particular configuration, which may have an impact upon the study’s generalizability. Located in Central and Eastern Europe at the crossroads of the EU, the Commonwealth of Independent States (CIS), and the Middle East, Romania is a leading destination for foreign direct investment, and it is recognized for the similarities of its distribution and sales channels, the range of its retail outlets, and the local retail market dominance on the Big Box segment by reputed major retailers. A spectacular evolution is recorded in Romania’s e-commerce market, including from the point of view of the long-standing and memorable traditional relationship between Romania and China which was confirmed more recently by Romanian consumers who prefer to buy online from stores in China. Our consumer research provides retailers with deep consumer insights with regard to their priorities in their agile adaptation. According to our research, Romanian consumers are environmentally concerned consumers, displaying an increased awareness about the important role they play with respect to impacting sustainable production and consumption by adopting green purchase behavior. Our study also points to the fact that retailers, although faced with challenges in targeting consumers with customized messages to reinforce their brand perception on sustainability issues, do pay considerable attention to sustainability as a personal value embraced by consumers and are willing to focus on digitizing their business processes to enable new, sustainable business models.

Determinants of Foreign Direct Investment in Jiangsu Province, China

China has turned to be one of the world’s most significant foreign direct investment (FDI) recipients, with FDI stock second only to the United States. Even though total FDI in China is substantially large, the spatial distribution of FDI is extremely uneven. The eastern coastal regions have always been important areas of China to receive FDI. Among the eastern coastal areas, Jiangsu province is consistently ranked second behind Guangdong province in terms of total FDI in China. However, FDI inflows of Jiangsu province surpassed Guangdong province for the first time in 2003. Although Jiangsu province has become a remarkable destination of FDI, the current FDI growth rate has started reducing. Therefore, it is crucial to investigate the determinants of FDI in Jiangsu province. Consequently, this study examines the determinants of FDI in Jiangsu province by employing an autoregressive distributed lag (ARDL) model with annual data during 1985-2019. In addition, we apply the Toda-Yamamoto Granger causality test to increase the robustness of our empirical results. The findings show that FDI in Jiangsu province is determined by average wage, education, and per capita GDP. Consequently, Jiangsu authorities should implement a policy to ensure a low wage rate and promote education in order to attract more FDI. In addition, the policy on economic development is needed to promote inward FDI in Jiangsu.

Competitive Advantage of Jeju Free International City as A Foreign Direct Investment Destination Competitive Advantage of Jeju Free International City as A Foreign Direct Investment Destination

Purpose: This study attempts to find an answer to the question “Why isn’t there enough foreign direct investment (FDI) on Jeju Island?” Although the local and central governments have been trying to attract more FDI to Jeju by introducing incentives and providing an investment-friendly environment since the Jeju Free International City (JFIC) Project started, there has not been a sufficient response so far. Research Design, Data, and Methodology: The Delphi Method is employed to analyze the competitive advantage of JFIC in terms of the determinants of locating FDI. The attractiveness of JFIC is assessed by 2-round questionnaires (N=20) and SPSS 20.0 is used for analysis. Results: The results show that the competitive advantage of JFIC is not very strong. The mean value of the integrated competitive advantage of JFIC is 3.56 against a possible maximum of 5.00. The Delphi results indicate that the competitive advantage in the tourism sector is stronger than the non-tourism sector. Conclusions: This paper may provide useful information to select ‘a choice and concentration’ strategy. This means that they can find out which factors of the determinants should be improved to make a targeted industry attractive, or they can choose an industry sector with a relatively strong competitive advantage instead.