The Foreign Direct Investment Location Decision: A Contingency Model of the Foreign Direct Investment Location Decision-Making Process

Despite considerable prior research into foreign direct investment (FDI) location decisions, our understanding of the processes underlying such decisions is still limited. Findings from work based in the economics and behavioral theories of the multinational enterprise (MNE) both acknowledge that FDI is not a point-of-time decision but a gradual process that yields important changes over its duration. However, these competing traditions both fall short when attempting to portray the actual process by which FDI location decisions are made by managers in MNEs. This gap has been recently attributed to two interrelated limitations. Firstly, level of analysis concerns have artificially separated managerial decision-making processes from the organizational and environmental structures within which they are made. Secondly, because of the complexity inherent in the FDI location decision environment, the study of these decisions has not taken contextual factors into consideration. This study addresses three important questions in order to build our understanding of the FDI location decision-making processes: (1) What are the decision-making processes that lead to FDI location choice? (2) What is the impact of contextual variables on FDI location decision-making processes at different levels of analysis, and are there any patterns of variation in decision processes under different decision conditions? (3) What factors drive final FDI location choice, and can a useful framework or theory be developed that links FDI location decision-making processes and context to drivers of FDI location choice? In order to address level of analysis concerns, the study places the manager at the center of the FDI location decision in modeling and in research, a strategy recommended by an emerging stream of behavioral-focused international business research (Aharoni, 2010; Buckley et al., 2007; Devinney, 2011). By examining FDI location decisions from the perspective of the managers who implement them, it is possible to clarify the nature of processes that lead to FDI location choice, and identify the impact of different elements of decision maker, firm and environmental context on such processes. The conceptual framework builds on Aharoni’s (1966) pivotal research while incorporating findings from broader behavioral managerial decision models and international business research. The framework is based on the assumption that FDI location decision-making processes and final choice are contingent upon interactions between the environmental, firm and decision maker context under which the decision is made. The research was undertaken in three phases. Phase 1 included a literature review that covered research on the MNE, internationalization, and decision making. The findings of the review identified key aspects of FDI location decision context and led to the development of an initial contingency framework of strategic decision making. Phase 2 consisted of an exploratory case study of twenty four FDI location decisions. The initial contingency framework developed during the literature review was used during this stage to identify the relationship between decision-making processes and contextual variables at the case decisions. By drawing on results from the exploratory research, an initial conceptual model and a set of propositions were developed. In Phase 3, twenty case studies were theoretically sampled from a pool of MNEs of varying size and parent-country nationality within the knowledge-based industries. The data collection and analysis followed a process, event-driven approach to case study research involving the mapping of key sequences of events as well as within- and cross-case analysis. The results identify the key elements of the decision process that explain FDI location behavior and develop a framework that links them together and makes them sensible. The four key elements of the FDI location decision that comprise the framework include: (i) the process, (ii) the context, (iii) patterns, and (iv) location. Research findings show the FDI location decision process as comprising of five broad stages, the content of each driven by a dynamic and evolving interpretation of maximum subjective expected utility. Utility preferences are identified as the consequence of shifting and opaque goals, founded upon imperfect information, operating in an environment marked by uncertainty. Five variations in the overall orientation of utility at case decisions, classified in the study as ‘decision rules,’ proved to be more useful predictors of decision-making behavior than traditional notions of bounded rationality seeking rent extraction and profitability. Decision processes were found to vary in five prototypical patterns, according to clusters of contextual variables that together moderated the level of decision-maker autonomy, hierarchical centralization, rule formalization, commitment to strategy, and politicization of the decision. Patterns are described as FDI location decision-making models, and proposed as an initial step towards the development of a taxonomy of FDI location decision-making processes. Because of the dynamic and staged nature of the process, findings showed that factors that were important at one stage of the decision were not as important at the next. As such, the task of identifying universal drivers of FDI location was deemed an unfeasible one. In place of universal drivers, the initiating force of the investment, the purpose of investment and information sources and networks are identified as the key context-specific determinants of location in FDI decisions. Bounded by uncertainty, chance, the dynamics of the process and decision-maker effects, each of these aspects of the decision served to limit the possible consideration set for investment, and formed the value basis and measures from which to select the most attractive location choice. Despite the contextual differences in these drivers, however, the study revealed a strong pattern that showed that the importance of specific location considerations differed in much the same way across case decisions. During the first stage of case decisions primarily strategic aspects of locations were considered; during the second, considerations relating to the system; operational concerns in the third; implementation concerns in the fourth; and added value factors in the final choice. How each of these concerns was interpreted to reach final location choice differed according to the drivers mentioned previously, although the patterns were the same. This study develops a contingency framework for examining the FDI location decision-making processes of MNEs under different operating conditions. By identifying the four key components of the FDI location decision, their interrelationships and many sources of variance, this thesis shows that despite its complexity, the FDI location decision is amenable to useful conceptual structuring. From an academic standpoint, the framework answers Aharoni’s most recent call to action in ‘Behavioral Elements in Foreign Direct Investment’ (2010) by developing a replicable structure within which to think about incorporating managerial decision models and context into the theory of the MNE. These findings enhance understandings of decision making at MNEs, reconcile a number of inconsistencies between opposing perspectives of MNE theory, and thereby update extant theory so that it has greater relevance in today’s diverse international business environment. From a managerial standpoint, the thesis helps managers to recognize the opportunities and limitations posed by different aspects of decision context so that they are able to tailor their FDI location decision strategies to best suit their needs. Finally, from the perspective of policy markers, research findings provide great support for the use of investment attraction schemes through the use of targeted location marketing and investment incentives.

Kinetic Mechanism of Ca2+-controlled Changes of Skeletal Troponin I in Psoas Myofibrils

Conformational changes in the skeletal troponin complex (sTn) induced by rapidly increasing or decreasing the [Ca2+] were probed by 5-iodoacetamidofluorescein covalently bound to Cys-133 of skeletal troponin I (sTnI). Kinetics of conformational changes was determined for the isolated complex and after incorporating the complex into rabbit psoas myofibrils. Isolated and incorporated sTn exhibited biphasic Ca2+-activation kinetics. Whereas the fast phase (k(obs)similar to 1000 s(-1)) is only observed in this study, where kinetics were induced by Ca2+, the slower phase resembles the monophasic kinetics of sTnI switching observed in another study (Brenner and Chalovich. 1999. Biophys. J. 77:2692-2708) that investigated the sTnI switching induced by releasing the feedback of force-generating cross-bridges on thin filament activation. Therefore, the slower conformational change likely reflects the sTnI switch that regulates force development. Modeling reveals that the fast conformational change can occur after the first Ca2+ ion binds to skeletal troponin C (sTnC), whereas the slower change requires Ca2+ binding to both regulatory sites of sTnC. Incorporating sTn into myofibrils increased the off-rate and lowered the Ca2+ sensitivity of sTnI switching. Comparison of switch-off kinetics with myofibril force relaxation kinetics measured in a mechanical setup indicates that sTnI switching might limit the rate of fast skeletal muscle relaxation

Ablation of cyclase-associated protein 2 (CAP2) leads to cardiomyopathy

Cyclase-associated proteins are highly conserved proteins that have a role in the regulation of actin dynamics. Higher eukaryotes have two isoforms, CAP1 and CAP2. To study the in vivo function of CAP2, we generated mice in which the CAP2 gene was inactivated by a gene-trap approach. Mutant mice showed a decrease in body weight and had a decreased survival rate. Further, they developed a severe cardiac defect marked by dilated cardiomyopathy (DCM) associated with drastic reduction in basal heart rate and prolongations in atrial and ventricular conduction times. Moreover, CAP2-deficient myofibrils exhibited reduced cooperativity of calcium-regulated force development. At the microscopic level, we observed disarrayed sarcomeres with development of fibrosis. We analyzed CAP2's role in actin assembly and found that it sequesters G-actin and efficiently fragments filaments. This activity resides completely in its WASP homology domain. Thus CAP2 is an essential component of the myocardial sarcomere and is essential for physiological functioning of the cardiac system, and a deficiency leads to DCM and various cardiac defects