Multinational Firms' Localization Choice

The purpose of this project is to examine determinants of inflows of Foreign Direct Investments (FDI). The aim is to examine causal effects of locational characteristics on FDI, which will provide valuable information for policy makers and researchers alike. There are potential benefits for host countries of FDI. However, the determinants of FDI inflows are unclear. Previous studies tend to use aggregate cross-country data unsuited for the task and examine correlations rather than causal effects. We will focus on three different determinants to FDI. Our first sub-project examines the effect of wage costs on foreign MNEs. The second part examines the effect of violent conflicts on FDI, and the third part examines the effect of governance on FDI.