The Determinants of Outward Foreign Direct Investment from Latin America and the Caribbean: An Integrated Entropy-Based TOPSIS Multiple Regression Analysis Framework

da Cunha H. C., Singh V., Xie S.

Journal of Risk and Financial Management, cilt.15, sa.3, 2022 (ESCI) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 15 Sayı: 3
  • Basım Tarihi: 2022
  • Doi Numarası: 10.3390/jrfm15030130
  • Dergi Adı: Journal of Risk and Financial Management
  • Derginin Tarandığı İndeksler: Emerging Sources Citation Index (ESCI), Scopus, ABI/INFORM, EconLit, Directory of Open Access Journals
  • Anahtar Kelimeler: OFDI, IFDI, home country context, formal institutions, infrastructure and technology, macroeconomic performance, TOPSIS, entropy weight method, Latin America and the Caribbean
  • TED Üniversitesi Adresli: Hayır

Özet

© 2022 by the authors. Licensee MDPI, Basel, Switzerland.Given that home country factors play a major role in the internationalization of emerging market firms, there is an ever-growing debate on how they influence the intensity of outward foreign direct investment (OFDI) from these regions. This study investigates how home country factors affect the OFDI intensity in Latin America and Caribbean (LAC) countries. We use the entropy weight method, which uses the Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) method and a balanced panel data consisting of 19 countries from 2007 to 2016. The results show a positive association between macroeconomic performance, formal institutions, infrastructure, technology and the OFDI intensity. Furthermore, we find that robust formal institutions, along with the quality of infrastructure and technology, positively moderate the relationship between macroeco-nomic performance and the OFDI intensity. These findings show that the internationalization of LAC firms is highly dependent on the contextual conditions in their markets.