Location
Determinants of Foreign Direct Investment in Real Estate (2008)
The
global real estate market is complexly structured and highly
competitive. In order to diversify the portfolio and to achieve the
highest risk adjusted return, real estate firms invest across national
borders. The choice of the most favourable location is of highest
importance for the success of the investment. This study analyses
determinants for the location decision in FDI in real estate. Based on
Dunning’s Eclectic Paradigm five determinants have
been tested. As Dunning refers to FDI over all industries this study
enlarges the scope by real estate specific considerations. Different
aspects of direct real estate investment are discussed and added to
Dunning’s theory. The study shows that mainly economic
factors of the local market, the availability of resources, production
costs, political conditions as well as cultural aspects influence the
choice of a location. More precisely, the infrastructure, the growth of
population, the degree of education, the productivity, the country risk
and the degree of long-term orientation of the host economy are
primarily relevant when the decision in favour of a location for FDI in
real estate is made. The indicators give a good idea of location
decision-making in the real estate industry. However, it follows from
the results that firm specific strategic considerations are of high
relevance to the investor and influence the decision more than the
analysed determinants. Risks are found to be less important as
multinationals have access to global financial markets and can hedge
capital and economic risks as well as translation and transaction
exposures.
- 10,000 words –
65 pages in length
- Excellent use of
literature
- Good in depth analysis
- Well written throughout
- Ideal
for finance and business students
1
INTRODUCTION
Research Purpose and Objectives
Setting the Scene
Outline of the Study
2
LITERATURE REVIEW
Motives for FDI
The Eclectic Paradigm
Locational Determinants
Hypothesis
3
METHODOLOGY
Method of Analysis
Data Collection Method
Data Basis
Constraints of the Research
4
RESULTS
Market
Resources
Production Costs
Political Conditions
Cultural and Linguistic Affinities
5
ANALYSIS AND DISCUSSION
Markets
Resources
Production Costs
Political Conditions
Cultural and Linguistic Affinities
6
CONCLUSION
7
REFERENCES
8
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