Logistics capability as a factor in foreign direct investment location choice

Abstract

This empirical study intends to explore the linkage between the logistics capability of a host country with the location choice and performance of foreign direct investments (FDIs). We survey the senior managers of multinational corporations operating in Asia, so as to develop a comprehensive logistics capability index needed to measure the performance of logistics hubs, and at the same time establish a link between the logistics capability and FDI location choice as well as the firm performance. By integrating theories from different domains, we seek to fill a research gap in the logistics and international business literature. Findings would help managers of multinational corporations to be better informed in their FDI location decisions, and assist policy makers of host countries to design proactive policies to improve the logistics capability of their countries, which would in turn attract more foreign investments and generate faster economic growth. © 2010 IEEE.