International business research and risky investments, an analysis of FDI in conflict zones

Abstract

The purpose of this paper is to examine the determinants of a firm's strategy to invest in a conflict location. To the best of our knowledge, this has not been done before. We examine this using a standard model of international business, overlaid with the fundamental approach to corporate social responsibility. We start with the population of multinationals who have chosen to invest in low income countries with weak institutions. We then split this sample in order to distinguish between firms that have invested in conflict regions compared to those that have not. Our analysis then proceeds to explain the decision of those firms to invest in conflict locations using a simple Probit model. We find that countries with weaker institutions and less concern about corporate social responsibility (CSR) are more likely to invest in conflict regions. Finally, firms with more concentrated ownership are more likely to invest in such locations.

Publication DOI: https://doi.org/10.1016/j.ibusrev.2012.03.001
Divisions: College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship
College of Business and Social Sciences > Aston Business School > Aston India Foundation for Applied Research
College of Business and Social Sciences > Aston Business School
Additional Information: NOTICE: this is the author’s version of a work that was accepted for publication in International business review. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Driffield, N, Jones, C & Crotty, J, 'International business research and risky investments, an analysis of FDI in conflict zones' International business review, vol 22, no. 1 (2013) DOI http://dx.doi.org/10.1016/j.ibusrev.2012.03.001
Uncontrolled Keywords: conflict,corporate social responsibility,FDI,institutions
Publication ISSN: 1873-6149
Last Modified: 28 Mar 2024 08:11
Date Deposited: 08 Feb 2013 11:06
Full Text Link:
Related URLs: http://www.scop ... tnerID=8YFLogxK (Scopus URL)
PURE Output Type: Article
Published Date: 2013-02
Authors: Driffield, Nigel (ORCID Profile 0000-0003-1056-3117)
Jones, Chris (ORCID Profile 0000-0003-1115-6409)
Crotty, Jo

Download

[img]

Version: Accepted Version


Export / Share Citation


Statistics

Additional statistics for this record