Location Choice Research: Proposing New Agenda

Abstract

Location decisions assume great significance for both managers and scholars as the choice of overseas location has the potential to either enhance or dissipate firms’ profitability. The aim of the paper is to conduct a critical review of the research articles that have been published on the topic of location determinants since 1975. We analyzed 151 articles published since 1975 until September, 2015 in 17 leading management and international business journals. Our analysis suggests that a vast amount of literature on foreign direct investment (FDI) catalogues a long list of determinants that try to explain FDI by multinational companies in a particular location. However, it is noticeable that the results have, sometimes, been equivocal. Based on our analysis, we suggest that location determinants can be organized into two broad categories. We use these categories to propose a comprehensive model and four agenda that, we believe, will be helpful to both the scholarly and managerial communities. Further, we attempt to decipher some salient research questions on the basis of our analyses. Our paper enhances the literature on location decision by providing a comprehensive model and directions for future research that will be of interest to the readers of management international review.