From the institutional economic geographic perspecive foreign direct capital investment: OECD example

Foreign direct investment, which has become a focal point with the fact of globalisation, is nowadays considered as one of the main economic activities that determine the competitive environment among countries. In this context, the determinants of foreign direct investment flows, which are the subject of studies, have become an case that is emphasised by politicians as well as researchers. At this point, the concept of location, which is an major determinant, is important of countries because of the effectual institutional structure and geographical advantages it provides. This study analyses, the spatial determinants, which are mostly overshadowed by economic determinants, from the perspective of institutional economic geography approach. In the study, the spatial determinants of foreign direct investment flows are analysed by using the System Generalized Method of Moments process with the econometric model constructed on OECD countries for the period 2001-2017. According to the results obtained, it is determined that institutional and geographical indicators are determinant on the process; especially institutional indicators have a higher impact. The results obtained are discussed in detail together with the theoretical arguments.