Asset-Exploitation Versus Asset-Seeking: Implications for Location Choice of Foreign Direct Investment from Newly Industrialized Economies

We wish to thank Professor John Dunning for his comments and continuous encouragement. We also thank three anonymous referees for their very insightful and helpful comments on earlier drafts. The work described in this paper was partially supported by a grant from the Research Grants Council of the Hong Kong Special Administrative Region (Project No. CUHK4052/99H). This study examined several hypotheses regarding the location choice of foreign direct investment from newly industrialized economies (NIEs). Using a sample of 328 Taiwanese firms in the analysis, this study found that the firms’ motivations had a significant impact on the choice of their investment location (developed countries vs. less developed countries), yet this impact was moderated by the capabilities that the firms possessed. The results suggest that both asset-exploitation and asset-seeking aspects of investments are predictive of the NIE firms’ location choice of investment.