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Exploring relationships between nation branding and foreign direct investment

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Abstract

This study explores the influence of nation branding on a country’s ability to send and receive foreign direct investment (FDI). Employing Anholt’s Nation Brand Index (NBI) and FDI data, the relationship is analyzed using valued exponential random graph models (ERGM) to account for interdependence between FDI flows while simultaneously estimating the changes in FDI flows in respect to differences in NBI scores. The study finds that while a stronger nation brand does contribute positively to both incoming and outgoing FDI flows, there are important differences in how different categories of nation branding contribute to FDI flows. Namely, the Export category is strongly associated with outgoing FDI, the Investment, Government, and Culture categories are positively associated with incoming FDI, and that the People and Tourism categories are negatively associated with incoming FDI. This study contributes to the nascent literature on place branding in that it combines the prominent Eclectic Paradigm for FDI from the economics literature with marketing and communication literature’s theories on nation branding.

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Notes

  1. https://www.ipsos.com/sites/default/files/anholt-ipsos-nation-brands-index.pdf.

  2. https://www.futurebrand.com/futurebrand-country-index.

  3. Full model results are provided in the Appendix.

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Authors and Affiliations

  1. School of Global Studies, Oklahoma State University, Stillwater, USA

    John Schoeneman & Jami Fullerton

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  1. John Schoeneman
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  2. Jami Fullerton
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Correspondence to Jami Fullerton.

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Summary statistics

Summary statistics

See Fig. 4.

Fig. 4
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Frequency count bar-plots for binary variables and distribution plots for continuous variables

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Country list

See Table 1.

Table 1 List of Countries included in sample N = 40
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Full model results

See Figs. 5, 6 and 7.

Fig. 5
figure 5

Estimates of network control terms in Poisson ERGMs. Bars span 95% confidence intervals. Some confidence intervals are not visible due to being small and the large range

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Fig. 6
figure 6

Estimates of exogenous edge terms in Poisson ERGMs. Bars span 95% confidence intervals. Some confidence intervals are not visible due to being small and the large range

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Fig. 7
figure 7

Estimates of exogenous node terms in Poisson ERGMs. Bars span 95% confidence intervals. Some confidence intervals are not visible due to being small and the large range

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Schoeneman, J., Fullerton, J. Exploring relationships between nation branding and foreign direct investment. Place Brand Public Dipl 19, 266–279 (2023). https://doi.org/10.1057/s41254-022-00264-4

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