Fixed costs play a crucial role in current models of foreign direct investment (FDI), yet they are almost entirely ignored in empirical treatments of FDI. We fill this gap by using a 1989-2001 panel of FDI flows into Iceland to examine the determinants of fixed costs for multinational firms and...

This paper applies the panel fixed effects with vector decomposition estimator to three FDI datasets to estimate the impact of time-invariant variables on FDI while including fixed effects. We find that the omission of fixed effects significantly biases several of these variables, especially...

Think of a small open economy interestingly positioned between the trade blocs of the NAFTA and the EU, with FDI in recent years resembling the pattern before the economic crash, making a pre-crash data set useful for exploring potential long-term trends. In this research, investment is...