A Gravity Model Analysis of Portuguese Foreign Direct Investment

Cultural and linguistic affinities have been studied in international business through the gravity model economics of language. International investment theories enable assessment organisational, location, internalisation motivations. The present study assesses impact transport costs, common language market size based on arguments model, language, theory. This investigation evaluates relationship between Portuguese FDI using panel data 2005 2020. OLS estimator, PPML-Poisson Pseudo-Maximum-Likelihood quantile regressions were used as an econometric methodology. Regarding research, we sought to understand what extent cultural issues, namely Portuguese-speaking countries, contribute explaining FDI. economic dimension economy investor countries introduced into regression model. In addition, transportation transaction costs analysed across geographical distances. results show that aspects are positively correlated with FDI, which allows us conclude reduces asymmetries home host country. When applied, it is possible observe has enough attract just investing a return made. Finally, distance negatively impacts showing proximity increases probability attracting