Research by Megan Yuan Li that investigated the increasingly important role of national sentiment in foreign direct investment decisions was publicized in International Business Review (IBR) in 2019. Rated as 3 star according to ABS ranking list, IBR aims to foster the exchange of ideas on a range of important international subjects and to provide stimulus for research and the further development of international perspectives. “As international conflicts become more intense, national sentiment seems to be a prominent issue in the decision making of international business,” the authors noted. Abstract is copied below.
Studies of foreign direct investment (FDI) decisions typically assume that decision makers and stakeholders act rationally. Drawing on studies conducted at the individual level, this study focuses instead on a?ect and explores theoretically and empirically how national sentiment in?uences FDI decisions. In particular, we develop a typology for understanding national sentiment along two axes—positive versus negative and accumulated versus transient—and investigate their separate in?uences on FDI. The results indicate that negative sentiment has a greater in?uence on FDI than positive sentiment and that accumulated sentiment has a greater in?uence than transient sentiment. This study complements conventional FDI research by demonstrating that national sentiment o?ers additional explanatory power beyond the variables known to in?uence FDI decisions. Moreover, our study shows that research conducted at the individual level can be useful for understanding the in?uence of a?ective elements on FDI decisions.
If you are interested in the research, please read the paper
Megan Yuan Li, Shige, Makino, Chunyan Jiang. 2019. Does national sentiment affect foreign direct investment, an if so, how? Additional evidence. International Business Review, 28(5): 1-19.
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Nanjing University of Aeronautics and Astronautics
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