ABSTRACT
In this chapter, the authors review the various theories that have been applied to Foreign Direct Investment (FDI) location choice. In practice, location decisions entail a simultaneous consideration of macro- and micro-location factors combined with firm-specific resources and characteristics, such as patents, technologies, know-how, production processes, or managerial talent. The authors integrate insights from management and International Business (IB) literatures with insights from urban economics and economic geography. They synthesize disparate studies of location choice to advance knowledge of the complex interplay in characteristics between firm and sub-national location that may determine why certain firms locate particular types of international activities in specific micro-locations. The authors contribute to IB and Economic Geography literatures by synthesizing the theoretical rationales and empirical evidence for multinational corporations (MNCs) location choice beyond the national level to offer some potential new directions for FDI location research.
