ABSTRACT
A theoretical approach which links FDI and the level of development is the so-called ‘investment development path model’ (IDP) (Dunning, 1981a; Dunning and Narula, 1996b). This approach argues that the net outward FDI position (NOFDIP) of a country is determined by the interplay of firm-specific (or ownership) advantages and home country location-specific advantages. The IDP is thus the development of the NOFDIP over time or over the development of the country in general. Therefore, we should expect a highly developed country such as Austria to be a net outward investor and a medium developed country such as Slovenia to be the net inward investor. Yet, a quick look at actual positions shows that the real situation does not seem fully in line with such expectations.
