The Location Determinants of FDI in Developing Countries: A Case of Myanmar

The aim of this study is to empirically examine fundamental factors that drive FDI to a particular location. This study further explores operating conditions of Korean firms in Myanmar. A survey methodology and then a regression analysis are employed. The study finds that the factors such as transportation, production factor, market, and cost play an important role for the location of FDI. However, the Korean investment in Myanmar decreases from 2013. The decrease of Korean investment implies that investing in Myanmar has not been profitable. The empirical study finds a complicated pattern of FDI. Large Korean firms are located far from the consumer market, thus, bear an increased transport cost to reach the consumer market. They are rather located in a place where they can access to a transport means and raw materials with low cost to export final products. They place FDI into a host country to serve as a production platform for exports to neighboring countries.