ABSTRACT
Recent evidence suggests that multinational corporations (MNCs) pay increasing attention to sub-national locational factors at the state, municipality, and city level when considering a suitable foreign direct investment (FDI) site (Cheng, 2007). While macro-level theories of economic agglomeration and institutions have provided insights into this phenomenon, additional guidance from Economic Geography and urban economics would provide a fuller picture of sub-national variation in FDI location attractiveness. Since MNCs look for specific geographic locations that enhance their ability to leverage firm-specific advantages, a synthesis of the interplay of national and sub-national, as well as firm-specific drivers of FDI location choice is needed in order to advance our understanding of MNC location strategy.
