Conceptual Framework for Exploring FDI Inflow to Small Economics: An Institutional Economics Approach

SALAH A. ALAWADHI
alawadhi@outlook.com

Vol. 06, No. 01, Year 2021, Pages 15-26

ABSTRACT

This paper aims to provide a conceptual framework, as sophisticated tool to systematically assist MNCs when conducting examination of a host country as potential location, and as a guidance for any prospective host country to assess their position. The conceptual framework deploys both Transection Cost (TC) and Institutional Analysis and Development (IAD) as operationalize instrument to execute the theoretical underpinning fundamentals. The conceptual framework consists of four stages, which are organised in a progressive order, and at any stage, if MNCs find the result of their stage assessment unsatisfactory, the conceptual framework postulate that the MNC would then drop the location, which results in the host country losing the investment opportunity.

Keywords: FDI, Conceptual framework, Transection cost, Institution’s analysis.

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Conceptual Framework for Exploring FDI Inflow to Small Economics: An Institutional Economics Approach