Investments from the BRIC countries in Germany - Location patterns and location factors from investors' point of view [Investitionen aus den BRIC-Staaten in Deutschland - Standortmuster und Standortfaktoren aus Sicht der Investoren]

Abstract

Since the late 1990s, foreign direct investment from emerging markets, such as Brazil, Russia, India, and China (so-called BRIC countries), has increased both in Germany and globally. While multiple analyses have already focused on the motives and strategies of firms investing internationally, research on subnational location choices in host countries have almost been neglected. This paper aims at closing this research gap by studying subnational location choices of multinational firms from BRIC countries in Germany. We identify detailed location patterns of greenfield investments in Germany and determine the factors influencing the location choices based on primary data taken from quantitative interviews. Our analysis reveals that investors from all BRIC countries predominantly consider three hard location factors: infrastructure, proximity to customers, and access to a qualified workforce. Other hard and all soft location factors appear to be of minor importance. Our results extend conceptual debates on location choices of emerging multinational firms and offer further information to business development agencies.