The art of deception: The trade-off between the information distortion and perception of FDI location attractiveness

Abstract

Objective: The objective of the article was to identify how various forms of information distortion influence foreign direct investment (FDI) location choices and location attractiveness perception. We focused on geopolitical factors that have been known to be an antecedent for FDI location choices but we identified new ways of impacting the perception of location’s attractiveness.

Research Design & Methods: To this means, we applied the total interpretive structural modelling (TISM method) based on expert knowledge.

Findings: Our findings illustrate how we cannot perceive FDI location decisions and the evaluation of their attractiveness as a simple, straightforward process. Based on the model, deep fakes are the most crucial geopolitical factors influencing the perception of FDI locations, followed by colour revolutions and false flag operations.

Implications & Recommendations: Our model suggests that the factors influencing FDI location perceptions create a dynamic, interconnected network of several interdependent layers that make FDI location selection challenging. The proposed TISM framework will support managers in formulating effective strategies for deciding on the next steps regarding their FDI location choices.

Contribution & Value Added: In previous studies, scholars mostly assessed geopolitical factors through the lens of the classical approach to geopolitics, i.e. the overall perception of geopolitical risk. Nevertheless, recent geopolitical disruptions (e.g. tensions between China and the US, Russian invasion in Ukraine) as well as technological advancements have uncovered new ways in which geopolitics can affect international relations, including trade and investments.

Keywords

information distortion, geopolitical factors, FDI location choice, FDI attractiveness perception, foreign direct investments

Author Biography

Katarzyna Mroczek-Dąbrowska

She holds a PhD and is an Associate Professor at the Poznan University of Economics and Business, Department of International Competitiveness. Her main research areas include international competitiveness of firms and industries, transaction costs, and the internationalization process of industries. She is the author and co-author of published works covering, among others, the Global Financial Crisis and its impact on strategies of Polish enterprises and the impact of Brexit on the EU-27 cohesion. Professor Mroczek-Dąbrowska is a National Representative of Poland in the European International Business Academy and works on several international research and teaching projects, cooperating with universities and consulting companies in the United Kingdom, Belgium, and Slovenia. Her research interests include entry modes, organizational resilience and global value chains.

Dawid Cherubin

PhD candidate at Poznań University of Economics and Business and specializes in critical geopolitics and foreign direct investment during and after the Covid-19 period.

Aleksandra Kania

Ph.D. in Economics (2017, Poznan university of Economics and Business) is Assistant Professor at Department of International Competitiveness at Poznan University of Economics and Business. She participated in national and international research and educational projects within the European Union. She focuses her research on company resilience, economic uncertainty and strategic management. She is a former Rotary Scholar in Mannheim, Germany and an active AIB and EIBA member. Before her current research role, she worked for MNEs in Poland and in Germany.

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