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Determinants of Foreign Direct Investment in Serbia: Is the Concept of Distance Relevant?

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Abstract

The aim of this chapter is to define the meaning and the role of distance in determining cross border investment transactions. Specifically, it aims, using a transition country, i.e. Serbia as a case study, at demonstrating the implementation of a model based on Ghemawat’s culture, administrative, geographic, and economic distance framework modified by substituting administrative by institutional distance for testing the relevance of distance in determining Foreign Direct Investment (FDI) inflows to a country. In addition, this chapter also illustrates how each of the above distance dimensions, i.e. cultural, institutional, geographic and economic, correlates with FDI at different industries categorised by technological level in manufacturing, i.e. high technology, medium high technology, medium-low technology, low technology subsectors, and in services sectors, i.e. low knowledge intensive and high knowledge intensive service sectors. With the exception of institutional distance the remaining distance dimensions, i.e. cultural, geographic and economic follow Ghemawat (Harvard Business Review 79:137–147, 2001) propositions. Therefore, the “CAGE distance framework” in this research is being transformed into “CIGE distance framework”.

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Author information

Authors and Affiliations

  1. Department of Balkan, Slavic and Oriental Studies, University of Macedonia, Thessaloniki, Greece

    Natasa Grujic & Dimitrios Kyrkilis

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  1. Natasa Grujic
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  2. Dimitrios Kyrkilis
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Editor information

Editors and Affiliations

  1. Faculty of Business Studies, University of Vaasa, Vaasa, Finland

    Jorma A. Larimo

  2. Aalborg Business School, Aalborg University, Aalborg, Denmark

    Marin A. Marinov

  3. Department of Business and Management, Aalborg University, Aalborg, Denmark

    Svetla T. Marinova

  4. School of Marketing and Communication, University of Vaasa, Vaasa, Finland

    Tiina Leposky

List of Appendices

List of Appendices

See Appendices 5.1, 5.2, 5.3, 5.4 and 5.5.

Appendix 5.1 Factor analysis/correlations
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Appendix 5.2 Factor loadings (pattern matrix) and unique variance
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Appendix 5.3 Factor analysis/correlations
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Appendix 5.4 Rotated factor loadings (pattern matrix) and unique variances
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Appendix 5.5 Factor rotation matrix
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Grujic, N., Kyrkilis, D. (2020). Determinants of Foreign Direct Investment in Serbia: Is the Concept of Distance Relevant?. In: Larimo, J., Marinov, M., Marinova, S., Leposky, T. (eds) International Business and Emerging Economy Firms. Palgrave Studies of Internationalization in Emerging Markets. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-27285-2_5

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