The two-way FDI development in Scandinavian countries

Abstract

This thesis investigates the two-way FDI development in Scandinavian countries, including Norway, Sweden and Denmark. The concept of two-way FDI, in this paper, refers to a combination of inward FDI and outward FDI. Firstly, this paper studies the two-way FDI structure of each country, based on the IDP framework (Dunning, 1981). The paper came to the conclusion that the two-way FDI patterns of both Norway and Denmark are in stage four of the IDP framework, however, this framework completely fails to explain the Swedish pattern. Then, this paper looked at the causes hidden behind these patterns according to the OIL theory (Dunning, 1988) and made comparisons of the location advantages and the domestic firms’ ownership advantages among the three countries. Finally, the paper offered both conclusions and new questions that can be discussed deeper in the future.