Macroeconomic determinants of outward foreign direct investment

The aim of this paper is to test the hypothesis that the outward foreign direct investment (FDI) position of countries may be considered as a function of country specific characteristics, such as income, exchange rate, technology, human capital and openness of the economy. The model developed identifies the main determinants of outward FDI using time series data for five European Union members and four non-European Union countries. The model indicates that real gross national product is proved the most important determinant of outward FDI. Developed European countries specialise in human capital intensive FDI, while non-European Union countries in technology intensive. Overall, the results verify that the outward FDI position of countries is influenced by national characteristics and that the same type of endowments have different significance for different countries.