Geographical Distance and FDIs in Denmark: The Case of the Capital and Zealand Region: Acknowledging the Importance of Spatial Considerations in International Business Research

Andrea Bina

Student thesis: Master thesis


The present study investigates how geographical distance affects the potential of Denmark as a destination for foreign direct investments (FDIs), by focusing on how this impact comes about in first place. Following a series of articles by Beugelsdijk, McCann and Mudambi, who have advocated for the adoption of a more ‘geographical’ approach in International Business research on space (funded on the explanatory role of spatial transaction costs), the research question is answered through a multi-phase research design consisting of:
- A systematic review of extant literature investigating how geographical distance impacts FDI-related variables through the generation of spatial transaction costs;
- The development of an exploratory case study, focusing on the relationships outlined in the previous phase, but allowing for further explorations guided by the data.
Findings show that geographical distance affects FDIs in a range of different ways, and not always ‘negatively’. The interpretive value of the developed framework allows to analyse observations related to the case of the Capital and Zealand regions; however, limitations related to the availability of relevant data do not allow to conclude on the significance of the observed relationships. Based on the conclusions, it is possible to draw potential implications for the strategies of local IPAs, involved in the effort of reducing barriers to incoming FDIs. Perspectives for future research, instead are focused around the need to obtain a better understanding of the impact of the discussed spatial transaction costs on individual decision-makers in MNEs.

EducationsMSc in Philosophy, (Graduate Programme) Final Thesis
Publication date2018
Number of pages80
SupervisorsAseem Kinra