The Role of Competitiveness in the Effect of Outward Foreign Direct Investments on GDP per Capita: A Conceptual Model Proposal

Abstract

The world has been rapidly globalizing, starting with communication protocols in 1970 and continuing today with internet technologies, and in the future, tools known as artificial intelligence and the metaverse. It is observed that technological change, especially in a high-uncertainty and hyper-competitive environment, has transformed more rapidly compared to past decades, directly affecting daily lives. This environment is described as economic, financial, and commercial globalization for companies and governments. Governments' development policies are encouraging companies that are Glocalization (think globally, act locally), transitioning from local to global, and benefiting the local areas, aligned with the investment strategies of companies in the home country. Our study examines concepts and relationships through a literature review within the theoretical framework of Dunning's eclectic paradigm, Porter's diamond model, Williamson's transaction cost theory, and strategic behavior theories. In the mentioned competitive environment, companies make their investment decisions outside their home countries considering four motives (resource seeking, efficiency seeking, market seeking, and strategic asset seeking). The aim of this study is to explain, from a competition perspective, why companies that want to gain competitive advantage in a globalizing world or avoid competition in the domestic market are investing out of their home countries. Planned to be conducted in 61 countries across 6 continents, according to the OECD classification, this study aims to contribute both to the companies' outward foreign direct investment decisions and to policymakers' process of creating sustainable development policies.