Foreign Direct Investment and the Role of Institutional Framework: Evidence from Greek Outward FDI

Abstract The present study analyses MNEs’ internationalization’s strategic motivation within different institutional and regulatory contexts through a study of Greek firms. Based on home country deficiencies, the study conceptualizes different internationalization motives in different regions, particularly CEECs and Western European countries. We use a unique database consisting of macro- and micro-level data covering the entire population of greenfield investments made from 2003 to 2019. Our analysis is based on Dunning and Lundan’s eclectic paradigm. Empirical evidence resulting from a panel data analysis and the fixed effects method corroborates our conceptualization of dualism on FDI motivations among the regions. In addition, a significant role of investment freedom is identified, which, depending on the region, either reinforces or moderates the importance of firm efficiency.