A New Approach to Evaluate the Location Factors Affecting FDIs' Operations

Abstract: Purposes: The aim of this dissertation is to find an applicable theoretical framework that could describe the factors affecting the operations of the established FDIs rather than the factors influencing the FDIs’ location decisions. The theoretical framework is also expected to be applicable in evaluating the investment environment for a specific area. Research questions: Can Dunning’s OLI theory and Porter’s Diamond theory be applicable to explain the factors that affect the established FDI operations in an EPZ? Can the factors relating to the location decision of FDI activities be used to construct our research framework? What conclusions can we draw through our research? Theoretical framework: Based on Dunning’s OLI theory and Porter’s Diamond theory, as well as some empirical studies’ results, we have established a factor hierarchy, in which six principal factors are presented at the first level of the factor hierarchy, and the six principal factors are further decomposed into 25 sub-factors at the second level of that hierarchy. A questionnaire was designed according to the theoretical framework, and a survey was conducted in the NETD. Results: The collected data from the survey was analyzed through the AHP approach. We have calculated a composite weight to each factor and put all the factors in order based on the weight that each factor has got. The finding in our study suggests that the NETD should further upgrade its working efficiency in order to create a more sustainable advantage. Also, our result further confirm that the government can play a significant role in creating competitive advantages in the age that the natural endowment becomes less important.