German and Austrian Foreign Direct Investment in Brazilian Regions: Which Are the Location Choice Factors?

Abstract

Due to the liberalization and transformation of emerging markets economies, the attractiveness of these countries for foreign direct investors has been rising in the last decades. This paper explores foreign direct investment location choice factors of German and Austrian companies in Brazilian regions. We perform the quantitative analysis, based on the Multinomial Nested Logit Model and supplement its findings by the qualitative analysis, based on the semi-structured experts’ interview. The analyses shown that investor-nation specific agglomeration, industry specialization, workforce qualification and physical infrastructure were important FDI location choice factors for German and Austrian companies in Brazil. Suggestions for future research of the FDI location choice factors are discussed.