DoesLocationReallyMatter?TheInfluenceof
the fdi LocationonEnterpriseCompetitiveness:
TheEvidencefromPolishEnterprises
MałgorzataSzałucka
NicolausCopernicusUniversity,Poland
m.szalucka@umk.pl
A company’s competitiveness depends on the linkages between its re-
sourcesandcapabilitiesandlocation-specificfactorswherethecompany
runsitsactivities.Companiescombinetheadvantagesofparticulargeo-
graphiclocationswiththeirresourcesandcapabilitiestoenhanceexisting
anddevelopnewcompetitiveadvantages.Theaimofthispaperistoeval-
uatetheimpactofinternationaloperationsintheformofforeigndirectin-
vestmentsonthecompetitivenessoftheinvestingcompaniesaswellasto
identifyareasofgreatestbenefitsderivedfrominternationalinvolvement
basedonthelocationoftheirforeignaffiliates.Thepaperpresentsresults
ofafieldsurveycarriedoutin2012throughdirectinterviewsamongPol-
ishcompanies–foreigndirectinvestors.Theresearchresultsrevealedthat
theforeignactivitiesofPolishenterpriseshaveapositiveinfluenceontheir
competitiveness;however,thefdiimpactisnotsoclearasitwasexpected.
Theempiricalfindingsalsoprovedthatthelocationoftheirforeignaffili-
atesdidnotinfluencesignificantlythescaleandnatureofbenefitsfromin-
ternationalactivitiesintermsoftheChi-squareanalysisapplied.However,
weobservesometendencies,basedontheimpactindex,indicatingsome
dependenciesbetweenthelocationofforeignaffiliatesandthefieldsofthe
fdiimpactindentifiedinthecompetitivepotentialofinvestingcompa-
nies.
Key Words:foreigndirectinvestment,locationadvantage,
competitiveness,developedcountries,developingcountries
jel Classification: f21,f23
Introduction
Internationalexpansionhasreceivedalotofattentionfrominternational
businessresearchinrecentdecades.Rapidglobalisationofeconomicac-
tivitieshasgreatlyexpandedtheopportunitiesforcompanydevelopment
andgrowth.Thisisillustratedbytheexperienceofmultinationalenter-
prises(mnes).mnebusinesspracticesconfirmthatgloballydispersed
ManagingGlobalTransitions13(2):125–149

126 Małgorzata Szałucka
valueaddingactivitiesmayprovidethecompanywithacompetitivead-
vantagenotavailableinthehomecountryorinasinglecountry,andsub-
sequentlysignificantlyincreasethecompany’scompetitiveness.Itmakes
the decision to go abroad one of the most critical strategic decisions
(WindandPerlmutter1977;Hill,Hwang,andChanKim1990;Agarwal
andRamaswami1992).
Themneactivityintheformofforeigndirectinvestment(fdi)has
registeredrapidgrowthoverthepastthreedecades.Thistrendreflects
themajorimportanceoffdiinbuildingandenhancingacompany’s
competitiveness.fdiofferscompaniestheopportunitytofullyexploit
thebenefitsofinternationalisation,suchasgainingaccesstonewcus-
tomers,spreadingbusinessriskacrossawidermarketbase,obtaining
accesstovaluablenaturalresources,achievinglowercostsorexploiting
better-possessedresource.Boththeorydevelopmentandempiricalstud-
iesstronglysupportapositiverelationshipbetweenfdiandcompeti-
tivenessofthecompany.However,mostofthemhavefocusedondefining
andinvestigatingmotivesandthefundamentalfactorsthatdrivefdibe-
haviour.Therearenotmanyempiricalstudiesthatdirectlyinvestigatethe
fdiimpactonthefirm’scompetitiveness,illustratingareaswheretheim-
pactwasidentifiedasaresultoftheinvestmentsmadeabroad(Dunning
1996;DunningandMcKaig-Berliner2002;Szałucka2008;2009;2010;
2014;GibbandSzałucka2012).Weassumethattheimpactareaswillvary
dependingonthelocationofforeignaffiliates.
Mostoftheempiricalstudiesonmneshavefocusedonlargeandma-
turecorporationsfromWesterncountriesandJapan.mnesfromCen-
tralandEasternEuropehave attractedlimitedattentionof empirical
researchers, mostly due to its quantity, scale and relatively short his-
tory(SvetličičandRojec1994;Andreff2002;Stare2002;Svetličičand
Jaklič2003;AntalóczyandÉltető2003;BohataandZeplinerova2003;
RosatiandWilinski2003;Varblane,Reiljan,andRoolaht2003;Kalotay
2004;2005;2008;Karpińska-MizielińskaandSmuga2007;Rugraff2010;
Karaszewski2009;Gorynia et al.2013; Karaszewskiet al.2014).Pol-
ishcompaniesdoingbusinessabroadintheformoffdiarestillare-
centphenomenon.However,theirinterestinforeignmarketsisgrowing
steadily,andisreflectedinasignificantincreaseinPolishoutwardfdi
fromtheperspectiveofflowsandstocks.
Theprincipalobjectiveofthispaperistoempiricallyinvestigatethe
impact offdiby Polishmneson their competitiveness as well as to
identifythoseareasthatbenefitmostfromtheinternationalisationof
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DoesLocationReallyMatter? 127
economicactivityintheformoffdi,dependingonthelocationoftheir
affiliates.Thepaperpresentssomeoftheresultsofafieldsurveyof64Pol-
ishcompaniesinvestingabroadviafdi.Itproceedsasfollows.Itbegins
withabriefdiscussionofthetheoreticalapproachtofdianditslocation.
Next,theauthorspresenttheempiricalmethodologyandresultsofre-
searchcarriedoutin2012amongPolishcompaniesinvestingabroad.The
researchfocusesondifferencesinthefdiimpactonthefirm’scompeti-
tivepotentialbetweencompanieslocatingtheirforeignaffiliatesmainly
indevelopedcountriesandthosewiththemajorityofaffiliatesindevel-
opingcountries.Thepaperattemptstoidentifytherelativeimpactofthe
fdilocationonthecompetitivenessofinvestors.
LocationAdvantages:TheTheoreticalFramework
Inordertobetterunderstandtherelationbetweenfdilocationandthe
competitivenessofmneswehavetorefertotheconceptoflocationad-
vantages.Theinteractionbetweenlocationadvantagesandthecompeti-
tivenessofmneshasbeenwidelydiscussedinacademicliterature.Due
tothecomplexnatureoflocationadvantages,theymaybeanalysedfrom
differentconceptualperspectives.Mostexplanationsofthelocationad-
vantagearebasedbothonconventionalinternationaltradetheoryand
fditheory(Rugman1980;RugmanandVerbeke2001;Dunning1993;
Misala2003;Rymarczyk2010).Thetheoreticalbasefortherelationbe-
tweenlocationandthecompetitivenesscanalsobefoundinthenew
economicgeography(Krugman1991;2000;Clark,Feldman,andGerther
2000;Scott2000).However,itistheconventionaltradetheorythatfor-
mulatesthefirstframeworkforlocationadvantagesbyintroducingthe
conceptoftheabsoluteadvantagebyAdamSmithextendedintothecom-
parativeadvantageintheRicardianmodel.Theissueisdiscussedfurther
intheHeckscher-Ohlinmodel.
RugmanandVerbeke(2001)emphasisetheneedtodistinguishdif-
ferentconceptualperspectivesofanalysinglocationadvantagesbecause
theycanvarysignificantlyfromeachother.Theywrite‘thedistinction
(betweentradeandfdi)iscriticalbecausethelocationadvantagesin-
strumentaltoexportsorimportsmaybeverydifferentfromthelocation
advantagesconducivetooutwardorinwardfdi.’Thispaperprovides
atheoreticalapproachtotheissuefromtheperspectiveoffditheory,
explainingthelocationadvantageinrelationtotheforeignactivitiesof
multinationalenterprises.
Theeconomicparadigmoftheactivitiesofmneshaslongandexten-
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128 Małgorzata Szałucka
sivehistory.Anumberoftheorieshavebeenformulatedtoexplainthe
phenomenonoffdiandtheactivitiesofmnes.Authorsproposingwide
explanationsoffdiincludeHymer(1960),Kindleberger(1969),Vernon
(1966),BuckleyandCasson(1976)andRugman(1980).However,they
wereperceivedasfragmentaryandnotcapableoffullyexplainingboth
thelocationofforeignactivitiesofmnesandtheownershipandor-
ganisationofthoseactivities.Theeclectictheoryofinternationalpro-
ductionpresentedbyDunning(1977)andalsoknownasoliparadigm
(anabbreviationfromownership,location,internalisation),hasbecome
thedominantanalyticalframeworkforexplainingtheforeignactivities
ofmnesoverthelastthreedecades.Theoliparadigmbuildsonthe
achievementsofpre-existingfditheories(thetheoryofmonopolistic
advantages,thelocationtheoryandtheinternalisationtheory),attempt-
ingtoformulateacomprehensiveexplanationoftheinternationalexpan-
sionpatternofenterprises(Dunning1977;1988;1993;2000).
Thetheoryformulatesthreeconditionsthatmustbesatisfiedifthe
companyistoengageinoperationsintheoverseasmarketintheformof
fdi(firstlytheinvestingcompanymustpossessadvantagesspecifictothe
ownershipwhichcanbeexploitonforeignmarkets;secondly,itshould
bemorebeneficialforthecompanytomakeuseoftheownership-specific
advantagesaspartofitsownactivitiesratherthantosellorleasethemto
othercompanies;finally,theremustbeatleastsomelocation-specificad-
vantagesinaforeignlocationtoattractthecompanytoservethemarket
withtheinvestmentmode).Thefulfilmentofallconditionsdetermines
theownership-specific,internalisationandlocation-specificadvantages
arisingfromforeignproductionwhichallsimultaneouslycontributeto
thecompetitiveadvantageofthecompany.
Theoliparadigmdirectlyreferstolocationasasourceofcompeti-
tivenessandindicatesanessentialroleoflocationadvantagesinthepro-
cessofmakingfdiandstrengtheningthecompetitivenessoftheinvest-
ingcompany.Theabilityoftheinvestingcompanytoexploitlocationas-
setsofaforeignmarketgivesthecompanyanopportunitytobetterde-
ployandprotecttheownership-specificadvantagesontheonehand,on
theotheritalsoenablesthecompanytodevelopnewownership-specific
advantagesbasedondifferenthostcountrylocationassets.
Theanalysisoftheacademicliteratureonlocationadvantagesatthe
individualcompanylevelindicatesthatthelocationadvantageisaresult
ofthecompany’saccesstovariousfactorendowmentsandcapabilities
spatiallydistributedwithintheworldeconomies(Dunning1993;Rug-
ManagingGlobalTransitions

DoesLocationReallyMatter? 129
man1980;Porter1990;Misala2003;Zorska2007).Thestatementdi-
rectlyreferstolocation-relatedtheoriesthatseektoexplainthelocation
ofvalue-addedactivitiesandtherelationshipbetweenthespatialdimen-
sionandthecompetitivenessoftheinvestingcompany.Thetheoriesas-
sumethatthereisageographicaldiversificationofthespatialdistribution
offactorendowmentsandcapabilities.Someofthemmightbespecificto
aparticularlocationinoriginandcanonlybedeployedbyapresencein
aforeignlocation.Wecanconcludethatthelocationadvantageoccursif
thelocation(ahomeorhostcountry)iswellendowedwithfactorsand
capabilities,particularlyvaluableforthecompany,whichcannotbeeas-
ilymovedanddeployedinanotherlocation.Theadvantageisbasednot
onlyonRicardiantypeendowmentssuchaslabour,landorcapital,but
alsoonnetworks,marketstructures,demandconditionsandinstitutional
factorssuchasthelegal,politicalandculturalenvironment.Theimpor-
tanceofparticularresourcesandcapabilitieslocatedinthehostcountry
variesinaccordancewithchangingconditionsoftheglobaleconomy.In
thiscontext,Dunning(1998)currentlystressesthecriticalroleofknowl-
edgeasa‘keywealthcreatingasset,’whilePorter(2000)emphasisesthe
growingimportanceofspatialclusteringandnetworklinkages.Notall
resourcesandcapabilitieslocatedinthehostcountrywillcreatealoca-
tionadvantage.Attheindividualcompanylevel,wediscussonlythose
location-specificfactorsandcapabilitiesthattrulycontributetothecom-
petitiveadvantageofacompany.
Theforegoingconsiderationsmightleadustotwoimportantconclu-
sions.Firstly,thelocationadvantageisassignedtoaparticularlocation
anditsuniquenessstemsfromtheimmobilityofcertainfactorsandca-
pabilitieslocatedthere.Porter(1998)arguesthatanythingthatcanbe
movedorsourcedfromadistancecannotbelongeracompetitiveadvan-
tage.Consequently,weshouldseeksourcesoflocationadvantagesinim-
mobile,naturalorcreatedfactorsandcapabilitiescharacterisedbycausal
ambiguity,socialcomplexityanduniquehistoricalconditionswhichcan
bedeployedprimarilybyapresenceinaforeignlocation(Barney1991).
Secondly,locationadvantagesmaybedifferentforeachcompany,and
whatcancontributetothelocationadvantageforonecompanymaybe
unattractiveandunimportanttoanother.Theyaresubjectiveandvary
betweencompaniesbecausetheydependoncharacteristicsofcompany’s
strategicobjectivesandownership-specificadvantages.Thus,theattrac-
tivenessofalocation(ofahostcountry)variesfromonecompanyto
another.Thelocationpreferencesofforeigndirectinvestorsandcor-
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130 Małgorzata Szałucka
respondingcriteriafortheoverallattractivenessofvariousgeographic
locationsaredefinedbythemotivesinfluencinginternationalexpan-
sionthataredirectlyrelatedwiththecompany’sstrategicobjectivesand
ownership-specificassets(Baumann1977;DanielsandRadebaugh1989;
Dunning1993;ShenkarandLuo2004).Itallowsustoconcludethatthe
locationadvantage(atthelevelofthecompany)willbedeterminednot
onlybyfactorendowmentsofferedbythelocation(externalvariables)
butalsobytheinvestingcompany’sresourcesandcapabilities(internal
variables)thatarereflectedinitsownership-specificadvantages.
Ownership-specific advantages originally defined by Hymer (1960)
playanessentialroleinexplainingwhyfirmsengageininternational
operations.Theyareaprerequisiteforfditotakeplace,butnotasuf-
ficientcondition(Dunning 1993).However,thispreconditionhasbe-
comelessobviousnowadays,inthecontextoffdifromemergingmar-
keteconomies(MoonandRoehl2001).Ownership-specificadvantages
areusuallyrepresentedbysuchelementsasproductdifferentiationabil-
ity,marketing,logisticandmanagementskills,trademarksandbrand
names,accesstorawmaterials,economiesofscale,accesstocapital,tech-
nology,patents,etc.,whichareunavailabletoothercompaniesanddiffi-
culttoimitate.Recently,theliteraturealsoincludesbusinessrelationships
andnetworkswithinacompanyandbetweencompaniesasanessential
firm-specificfactorthatcanleadcompaniestosuperiorperformancein
foreignmarkets(JohansonandVahlne2009).Theymaybecrucialin
thecaseofcountry-specificfactorslocatedinthehostcountry,under
thecontrolofhostcountryfirmsandasaresultnotfreelyaccessible.In
thiscase,thedevelopmentofarelationshipwiththosecompaniesisof-
tenapreconditiontoobtainingaccesstothedesiredfactorendowments
(Hennart2009).
Itaki(1991)emphasisesownership-specificandlocation-specificad-
vantagesinseparabilityandarguesthattheyaresimultaneouslydeter-
mined.Ontheonehand,ownership-specificadvantagesmustbecom-
binedwithsuitablelocationfactorsinthehostcountryandtheyinfluence
thelocationdecision.Ontheotherhand,thesameownership-specific
advantagesareaffectedbylocationfactors.Consequently,fdicreatesan
optionnotonlyforexploitingandprotectingexistingownership-specific
advantages,butalsofordevelopingnewonesbycombiningthecom-
pany’sresourcesandcapabilitieswithadvantagesofthoselocationswhere
affiliatesareestablished.
Therelationshipbetweenownership-specificadvantagesandlocation-
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DoesLocationReallyMatter? 131
specificadvantagesisalsobroadlyillustratedbytheconceptofthedia-
mondofcompetitiveadvantagesuggestedbyPorter(1990)andlaterde-
velopedbyRugmanandD’Cruz(1993)intothe‘double’diamondofcom-
petitiveadvantage.Portersuggestsinhisworkthatthecompany’scom-
petitiveadvantageisdeterminedbytheeconomicenvironmentinwhich
itisembeddedanditislocation-boundresourcesthatdefinethecom-
pany’sadvantageovercompetitors.
Inthispaperwearguethatthecompetivenessofthecompanyiscre-
atedandshapedbyamyriadofcountry-andfirm-specificfactorswhich
findtheirreflectioninacompany’scompetitivepotential.Thecompet-
itivepotentialisafundamentalfactordeterminingtheabilitytoobtain
andstrengthenthecompetitiveadvantage.Itiscreatedbyresourcescon-
trolledbythecompanywhichenableittocompeteeffectivelyinthemar-
ketplace(Szałucka2009).Theadvantage-generatingresourceshavebeen
widelydescribedintheresource-basedviewliteraturewhichfocusesat-
tentiononresourcesendowmentsofthefirmasafactorexplainingper-
formanceheterogeneityatthefirmlevel(Peteraf1993;Grant1991;Barney
1991;Hall1992;AmitandSchoemaker1993).Thecompetitivepotentialis
deeplyembeddedintheeconomicenvironmentwhichnotonlyshapes
itbyverifyingthevalueoftheparticularresourcesfromtheperspective
ofmarketbutalsobybeingthesourceofnewresources.Inthiscontext,
fdiwithitsinternaltransfersofresourcesbetweenunitsintheorgani-
sationhasmergedasatoolenablingbetterexploitationandprotection
ofresourcesalreadycontrolledbythecompanyontheonehand.Onthe
otherhand,fdiallowstoobtainanddevelopnewresourcesbasedon
variouslocationendowmentsofferedbyforeignmarkets.Thecompanies
enteringforeignmarketsviafdigainaccesstoalargeanddiversere-
sourcepoollocatedinthehostcountrieswhichcanbetransformedby
obtaining,developing,combining,andleveragingintothecompetitive
advantage.
Tosummarise,thegeographicaldistributionofvalue-addedactivities
determinesthescaleandthenatureofthebenefitsthataccruefromin-
ternationalexpansioninthefdiform.Thetheoreticalapproachallows
ustoassumethatifalloliconditionsaresatisfied,regardlessofthelo-
cationoftheaffiliate,theoreticallytheforeigninvolvementshouldcon-
tributetocompetitiveadvantage.However,becausetherearesignificant
differencesinlocation-specificassetsofferedbyvarioushostcountries,
wecanassumethattherearedifferencesinthefieldsofthefdiimpact
andthenatureofbenefitsderivedfromaffiliateslocatedthere.
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132 Małgorzata Szałucka
Inthepaperwedecidedtogroupcountriesbasedonsharedfeatures
ofnoteintotwocategories–developinganddevelopedcountries.Weas-
sumethatthebenefitsfrominternationalisationmaybedifferentinthe
caseofthesetwocategoriesofcountries,duetotheirspecific,structural
conditionsandtheirdistinguishingfeatures.Keyfeaturesofdeveloped
anddevelopingcountriesdifferintermsofgrowthrateandprospectsfor
marketsexpansion,needsofcustomers,levelofincome,economicde-
velopment,labourproductivity,technologylevel,competitionintensity,
marketstructure,infrastructureetc.
Basedonthediscussionabove,thefollowinghypothesisissuggested:
h1 There are significant differences in the fields of the fdi impact on
competitivepotentialoftheinvestingcompanydependingonthe fdi
location.
Methodology
Theresearchwascarriedoutin2012amongPolishcompaniesthathadal-
readyestablisheddirectinvestmentactivityabroad.Theresearchcovered
thegroupofcompaniesheadquarteredwithintheRepublicofPoland
withoperationsabroadintheformoffdi.Thedatabasedevelopedbythe
researchteamincluded622companies.Anon-randomsamplingmethod
wasappliedwhichlimitedtheextenttowhichfindingscanbestatistically
representative.Additionally,asmallsamplesizewasalimitationofthe
study.Therefore,thefindingscannotbegeneralisedtotheentirepopula-
tionandwecantestthehypothesisonlyintermsofinitialindications.
Themainresearchwascarriedoutusingdirectinterviewsconducted
byprofessionalinterviewersfromPentorResearchInternationalsawho
usedastandardisedquestionnairedevelopedbytheresearchteam.In
mostcases,theinformationwasreceivedfromfinancemanagerswithin
thecompaniessurveyed.Thedirectinterviewquestionnaire,referringto
thepartoftheresearchpresentedinthispaper,containedonlyclosed
questionsallowingcompaniestoaddtheirownresponses.Duringthe
analysisoftheresearchresults,thenumberofrespondentsthathadan-
sweredaspecificquestionwasalwaystakenasthebasisforanycalcula-
tions.
WeusedfrequenciesandtheChi-squaredtestofindependenceatthe
significancelevelp=0.05toanalysethedata.Wherequestionsrequired
therespondenttoestablishacertainhierarchybyindicatinghisevalua-
tionbasedontheimpactcriterion,weappliedalsotheimpactindexin
thefollowingform:
ManagingGlobalTransitions

DoesLocationReallyMatter? 133
table1 NumberandStructureofCompaniesSurveyedandfdiProjectsbyLocation
Location () () () ()
Developingcountries  .  .
Developedcountry  .  .
Developed&developingcountries – –  .
Mainlyprojectsindevelopingcountries – –  .
Mainlyprojectsindevelopedcountries – –  .
Parityofprojectsindevelopinganddevelopedcountries – –  .
Total   * *
notes Columnheadingsareasfollows:()numberofprojects,()percentageoftotal
projects,()numberofcompanies,()percentageoftotalcompanies.*Theresultsdo
notadduptobecausetwodifferentcategoriesofrespondentsarepresentedina
singletable.
W =
 k
i=1
n
1
w
i
k·N
,( 1 )
whereWistheimpactindex,iistheevaluationindex,n
i
isthenumberof
indicationsofafactorinthei-position;kisamaximummarkonthescale
rangingfrom1to k(indicatingtheorderoffactorsmeantgivingthem
marksinthereverseorder), Nisthenumberofrespondentswhohave
answeredthisquestion,andw
i
istheevaluationreflectingthepositionof
theifactor.
Overall64correctlycompletedquestionnaireswerereceived,repre-
sentinganoverallreturnrateof10.3.
Outof64Polishcompaniesparticipatedinthesurvey51ofthemhad
locatedthemajorityoftheirprojectsindevelopingcountries(32outof
63).125companiesundertookfdiindevelopingcountriesonly.Thede-
velopedcountriesasafdilocationpredominatedinthecaseof30com-
paniessurveyed(48).22companieslocatedtheirfdiprojectsonlyin
developedcountries(table1).
Thecorrectlycompletedquestionnairesrepresentedcompaniesen-
gagedinatotalof290fdiprojects.147outof290fdiprojectswere
locatedindevelopingcountries(51),andtheremaining143indevel-
opedcountries(table1).Respondentstendedtolocatetheirinvestment
projectsrelativelyclosetothehomemarket.Europewastheprimarylo-
cationforthesurveyedcompanies,wheretheylocated95oftheiraf-
filiates(figure1).ThecompanieschosemainlyEuropeanUnionmem-
bercountries(67).OtherCentralandEasternEuropeancountrieswere
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134 Małgorzata Szałucka
eu-15countries 45
OtherCentralandEasternEuropeancountries 23
eu-12countries 22
OtherWesternEuropeancountries 5
Othercountriesintheworld 5
figure1 fdiProjectsSurveyedbytheGeographicalZones
anotherpopularchoiceforlocatingfdiprojects.Thisgroupofcoun-
trieswashosttoalmost23oftheprojectsreportedinthesurvey.The
countriesthatwerechosenmostfrequentlyamongthedevelopedcoun-
trieswereGermany(53projects),followedbyFrance(33)andSwitzerland
(10).AmongthedevelopingcountriesRussiapredominated(30projects),
followedbytheCzechRepublic(29),Ukraine(24)andSlovakia(12).
ResearchResults
In48ofthesurveyedcompanieswiththemajorityofprojectslocated
indevelopingcountriesfdicontributedtoimprovingtheircompetitive
potential,whereasforcompanieswithprojectspredominantlylocatedin
developedcountriesthefigurewas43(table2).Positivechangesinden-
tifiedbybothgroupsofrespondentsweremainlyofamoderatenature.
Only7ofinvestorsengaginginfdilocatedmainlyindevelopedcoun-
triesdeclaredsignificantpositivechangeintheircompetitivepotential
relativetomajorcompetitorsonthedomesticmarket.Theinvestorswith
themajorityofprojectsinthedevelopingcountriesseemtobenefithighly
fromfdimoreoftenthantheothers(19).However,allinvestors,irre-
spectiveofthefdilocation,mostfrequentlydidnotobserveanychanges
inpotentialrelativetotheirmaincompetitors(52inthecaseofcompa-
niesinvestingprincipallyindevelopingcountriesvs.57inthecaseof
thoseinvestingpredominantlyindevelopedcountries).Inaddition,none
ofthecompaniessurveyedidentifiedanydeteriorationintheirpotential.
Smalldifferencesinpercentagesbetweenthetwogroupsofrespondents
areconfirmedbytheChi-squaredtest(χ
2
=0.156,df =1,p=0.05).The
impactoffdidoesnotvarysignificantlybetweenthetwocategoriesof
companies.Thisconfirmsthegeneralassumptionthatifthehostcoun-
tryselectionprocessisoptimalandthecompanycorrectlycombinedits
ownership-specificadvantageswithlocationassets,thelocationsselected
shouldcontributetothecompetitiveadvantageofthecompaniesirre-
spectiveoftheirgeographicaldistribution.
Inthecaseoftheimpactoffdionthecompetitivepotentialrelative
ManagingGlobalTransitions

DoesLocationReallyMatter? 135
table2 TheImpactoftheSurveyedCompanies’ForeignDirectInvestmentonTheir
CompetitivePotentialRelativetoMajorCompetitorsontheDomestic
MarketbyfdiLocation()
Amajorityofaffiliates () () ()
inthedevelopingcountries . . .
inthedevelopedcountries . . .
notes Columnheadingsareasfollows:()significantimprovement,()moderateim-
provement,()nochange.
table3 TheImpactoftheSurveyedCompanies’ForeignDirectInvestmentonTheir
CompetitivePotentialRelativetoMajorCompetitorsontheForeignMarket
byfdiLocation()
Amajorityofaffiliates () () () ()
inthedevelopingcountries . . . .
inthedevelopedcountries . . . .
notes Columnheadingsareasfollows:()significantimprovement,()moderateim-
provement,()nochange,()moderatedeterioration.
tothemaincompetitorsoperatingonforeignmarkets,amoresignifi-
cantdifferencewasidentifiedbetweenthetwocategoriesofcompanies
surveyed(table3).Thepercentagestatisticspointtoamoreexplicitrela-
tionshipbetweenchangesincompetitivepotentialandthelocationofaf-
filiates.Thoserespondentswithaffiliatesmainlyindevelopingcountries
morefrequentlyidentifiedpositivechangesinthecompetitivepotential
relativetomajorcompetitorsinforeignmarketsthanthosethatoperate
primarilyindevelopedcountries.Almost68oftheformergroupevalu-
atedthechangesintheirpotentialaspositiveand23ofthemdescribed
theimprovementassignificant.Incontrast,companiesthatoptedforaf-
filiatesindevelopedcountriesseemedtorecogniselowerbenefitsfrom
fdi.Inonly43ofcases,apositivechangewasidentifiedandsignificant
improvementwasobservedby13ofrespondents.
Althoughwecanobservesomedifferencesbetweenthetwogroupsof
respondentsbasedonpercentagestatistics,andhigherbenefitsseemto
bedeclaredbycompanieswiththemajorityoffdiprojectslocatedinde-
velopingcountries,theChi-squaredtestdidnotconfirmtheassociation
(χ
2
=3.682,df =1,p=0.05).Thereisnosignificantdifferencebetween
thefrequenciesinthesetwocategoriesofrespondents.Wecansaythat
thechangesobservedinthecompetitivepotentialasaresultoffdiwere
independentofthefdilocation.
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136 Małgorzata Szałucka
table4 fdiImpactontheCompetitivePotentialComponentsamongtheSurveyed
CompaniesbyfdiLocation(TheImpactIndex)andtheResultsofthe
Chi-SquaredTestofIndependenceattheSignificanceLevelp=0.05forthe
ComponentsoftheCompetitivePotential
Specifications () () () ()
Researchanddevelopment . . xx
Researchanddevelopmentfacilities . . . .
Knowledgeandskillsintheareaofcreating
innovations
. . . .
Innovationsinproductsandservices . . . .
Innovationsinproductionprocesses . . . .
Production/services . . xx
Production(service)facilities . . . .
Abilitytogainadvantagesofscale . . . .
Leveloftechnologicaladvancement . . . .
Knowledgeandskillsintheareaoftechnology . . . .
Employeecompetences . . . .
Accesstolabourresources . . . .
Accesstonaturalresources . . . .
Accesstorawmaterialsandsemi-products/
supportingservices
. . . .
Knowledgeandskillsintheareaoflogistics . . . .
Relationswithsuppliers . . . .
Qualityassurancesystem . . . .
Knowledgeandskillsintheareaofquality . . . .
Salesandmarketing . . xx
Accesstomarkets . . . .
Understandingcustomerneedsandpreferences . . . .
Understandingcompetitorbehaviour . . . .
Abilitytoensurereliabledeliveries . . . .
Knowledgeandskillsintheareaofmarketing . . . .
Relationswithcustomers . . . .
Abilitytoquicklyrespondtomarketchanges . . . .
Continuedonthenextpage
Adetailedanalysisofthefdiimpactonthecompetitivepotential
basedontheimpactindexrevealedsomedifferencesinbenefitsfrom
ManagingGlobalTransitions

DoesLocationReallyMatter? 137
table4 Continuedfromthepreviouspage
Specifications () () () ()
Finances . . xx
Equitycapital . . . .
Accesstodebtcapital . . . .
Costlevel . . . .
Knowledgeandskillsintheareaoffinance
management
. . . .
Degreeofriskdiversification . . . .
Intangibleassets . . xx
Enterprisereputation . . . .
Brandofproductsandservices . . . .
Intellectualpropertyrights . . . .
Organisationandmanagement . . xx
Enterprisesize . . . .
Organisation’sculture . . . .
Organisation’sstructure . . . .
Knowledgeandskillsintheareaoforganisation . . . .
Interpersonalrelationswithintheenterprise . . . .
Abilitytoallocateresourceseffectively . . . .
Abilitytocoordinateresourceseffectively . . . .
Locationadvantagesresultingfromlegalnorms
andeconomicconditionsforbusinessactivity
. . . .
Otherrelationswiththeexternalenvironment . . . .
notes Columnheadingsareasfollows:()amajorityofaffiliatesinthedeveloped
countries,()amajorityofaffiliatesinthedevelopingcountries,()χ
2
statistic,()χ
2
α=
0.05, s.
Theimpactindexadoptsthevaluefrom−1to,whereastheindexvalue−1≤ w≤0,5
signifiesanegativeinfluence,−0,5≤ w<0signifiesmoderatenegativeinfluence,w=0
signifiesnoinfluence,0> w≥0,5signifiesmoderatepositiveinfluence,and0,5> w≥1
signifiespositiveinfluence.
internationalisation,dependingonthelocationoftheaffiliates(table4).
Thesefindingscorrespondtothetheoreticalapproachpresentedearlier
andprovideempiricalsupportforourhypothesisconcerningdifferences
intheareasofthefdiimpactoncompetitivepotentialoftheinvesting
company,dependingonthefdilocation.Theresearchresultsindicated
thattheaffiliateslocatedinthedevelopedcountriescontributedmostto
Volume13·Number2·Summer2015

138 Małgorzata Szałucka
abetterunderstandingofcustomerneedsandpreferences(0.59–the
impactindex;ranked1st),ahigherlevelofknowledgeandskillsinthe
areaoftechnology(0.53)andabetterunderstandingofcompetitorbe-
haviour(0.52).Thefindingsarepresentedinfigure2.Strongbenefitswere
alsoindentifiedinknowledgeandskillsintheareaoforganisationand
marketingaswellasinaccesstomarketsandqualityassurancesystems
(0.50).Allcomponentsofthecompetitivepotentialwereranked4th.
fdialsocontributedsubstantiallytotheimprovementoforganisational
culture,theabilitytoquicklyrespondtomarketchanges,relationswith
customersandtheleveloftechnologicaladvancement.Significantdif-
ferencesbetweenthetwocategoriesofrespondentsbasedontheimpact
indexwerenotedprimarilyintheareaofproduction,organisationand
management.Theaffiliateslocatedindevelopedcountriesincompari-
sontothoselocatedindevelopingcountriescontributedrelativelymore
toimprovingknowledgeandskillsintheareaoftechnology(2ndvs.
12thplaceintheranking),qualityassurancesystems(4thvs.11thplace),
theleveloftechnologicaladvancement(5thvs.15thplace),theabilityto
ensurereliabledeliveries(6thvs.14thplace)andknowledgeandskills
intheareaoffinancemanagement(9thvs.19thplace).Furthermore,
therespondentswiththemajorityoffdiprojectslocatedindeveloped
countriesalsoidentifiedrelativelyhigherbenefitsfromtheirinternational
operationscomparedtothoserespondentsrunningtheiraffiliatesmainly
indevelopingcountriestoknowledgeandskillsdevelopmentintheareas
ofmarketingandorganisation,organisationalcultureandinnovationsin
productsandservices.
Basedontheanalysisoftheresponses,companieswiththemajorityof
fdiprojectslocatedindevelopingcountriesmanifestslightdifferences
intheareasoffdiimpact(figure3).Themostpositivefdiimpactwas
notedinaccesstomarkets(0.75),anelementthatwasrankedlowerbythe
companiesrunninginternationaloperationsmainlyindevelopedcoun-
tries(0.50,ranked4th).Understandingofcustomerneedsandprefer-
encesandcompetitorbehaviourwereranked2ndand3rdrespectively.
Interestingly,theaffiliateslocatedinthedevelopingcountriesledtoa
relativelyhighimprovementinrespondents’knowledgeandskillsinthe
areaoflogistics.Thiswasrankedanequal4thwiththeabilitytoquickly
respondtomarketchangesandrelationswithcustomers(0.53).Thein-
vestorsalsoevaluatedhigherthefdiimpactonthesizeofthecompany,
onrelationswithsuppliersandontheabilitytogaineconomiesofscale
(rankedanequal5th)whencomparedtothoserunningtheirforeignac-
ManagingGlobalTransitions

DoesLocationReallyMatter? 139
Understandingcustomerneedsandpreferences 0.59
Knowledgeandskillsintheareaoftechnology 0.53
Understandingcompetitorbehaviour 0.52
Qualityassurancesystem 0.50
Knowledgeandskillsintheareaofmarketing 0.50
Knowledgeandskillsintheareaoforganization 0.50
Accesstomarkets 0.50
Abilitytoquicklyrespondtomarketchanges 0.48
Leveloftechnologicaladvancement 0.48
Organization’sculture 0.48
Relationswithcustomers 0.48
Employeecompetences 0.47
Enterprisereputation 0.47
Brandofproductsandservices 0.47
Abilitytoensurereliabledeliveries 0.47
Relationswithsuppliers 0.46
Enterprisesize 0.45
Innovationsinproductsandservices 0.45
Knowledgeandskillsintheareaoflogistics 0.43
Knowledgeandskillsintheareaoffinancemanagement 0.42
Organization’sstructure 0.42
Abilitytogainadvantagesofscale 0.42
figure2 ForeignDirectInvestmentImpactontheComponentsofCompetitive
PotentialamongtheSurveyedCompanieswiththeMajorityofAffiliates
LocatedinDevelopedCountries(TheImpactIndex)
notes The impact index adopts the value from −1to1,whereastheindexvalue
−1≤ w≤ 0,5signifiesanegativeinfluence,−0,5≤ w< 0signifiesmoderatenega-
tiveinfluence, w = 0signifiesnoinfluence,0> w≥ 0,5signifiesmoderatepositive
influence,and0,5> w≥1signifiespositiveinfluence.
tivitiesmainlyindevelopedcountries.Inaddition,higherscoreswere
assignedtoimprovementsinaccesstolabourresources(ranked9th),
knowledge and skills in the area of logistics and equity capital (both
ranked10th).Finally,contributionstoimprovingbrandproductsandser-
vicesaswellasthereputationofthecompanywerereportedirrespective
ofthegeographicallocationoftheaffiliates.
Although,basedontheimpactindex,wecanobservesomediffer-
encesinthebenefitsfromfdi,thestatisticalanalysisdidnotconfirm
thesefindings.WeusedtheChi-squaretestforindependencetodeter-
minewhethertheareasoffdiimpactarerelatedtothelocationofthe
affiliate.Unfortunately,theChi-squaretestdidnotrevealanysignificant
differencesinthefieldsofthefdiimpactbetweenthetwocategoriesof
respondents(table4).Asignificantassociationwasobservedonlyin2out
Volume13·Number2·Summer2015

140 Małgorzata Szałucka
Accesstomarkets 0.75
Understandingcustomerneedsandpreferences 0.67
Understandingcompetitorbehaviour 0.63
Abilitytoquicklyrespondtomarketchanges 0.53
Knowledgeandskillsintheareaoflogistics 0.53
Relationswithcustomers 0.53
Abilitytogainadvantagesofscale 0.50
Relationswithsuppliers 0.50
Enterprisesize 0.50
Brandofproductsandservices 0.47
Enterprisereputation 0.45
Knowledgeandskillsintheareaoforganization 0.45
Knowledgeandskillsintheareaofmarketing 0.45
Employeecompetences 0.44
Accesstolabourresources 0.41
Organization’sstructure 0.41
Equitycapital 0.39
Organization’sculture 0.39
Knowledgeandskillsintheareaofquality 0.39
figure3 ForeignDirectInvestmentImpactontheCompetitivePotential
ComponentsamongtheSurveyedCompanieswithaMajorityofAffiliates
LocatedintheDevelopingCountries(TheImpactIndex)
notes The impact index adopts the value from −1to1,whereastheindexvalue
−1≤ w≤ 0,5signifiesanegativeinfluence,−0,5≤ w< 0signifiesmoderatenega-
tiveinfluence, w = 0signifiesnoinfluence,0> w≥ 0,5signifiesmoderatepositive
influence,and0,5> w≥1signifiespositiveinfluence.
of39componentsofcompetitivepotentialevaluated.Significantdiffer-
encesbetweenthetwocategoriesofrespondentswereindentifiedinthe
caseofaccesstomarkets(χ
2
=4.133,df =1,p=0.05)andknowledgeand
skillsintheareaoffinancemanagement(χ
2
=4.778, df =1,p =0.05).
Theaffiliateslocatedindevelopedcountries,whencomparedtothose
locatedindevelopingcountriesmadeasignificantlyhighercontribution
toimprovingknowledgeandskillsintheareaoffinancemanagement,
whereastheaffiliateslocatedindevelopingcountriescontributedsignif-
icantlymoretoincreasingmarketaccess.
DiscussionandConclusions
Afirm’sinternationalcompetitivenessisacomplexphenomenonwhichis
shapedbybothfirm-leveladvantagesandcountry-leveladvantages.This
suggeststhedirectlinkbetweengeographiclocationandthecompetitive
advantageofthefirm.Aninternationalactivityviafdigivesthecom-
ManagingGlobalTransitions

DoesLocationReallyMatter? 141
paniesthepossibilityofexploitingadvantage-generatingassetsfromva-
rietyoflocationsaroundtheworld.Resourcesandthecompetitivepo-
tentialdirectlylinkedtothemseemtoplayanessentialroleincreating
andmaintainingthecompetitiveadvantage.Bothelementsareshaped
andcreatedbytheenvironment,whichshiftsthecentralfocustoloca-
tion.Thereisnodoubtthatwidelyunderstoodlocationassetsassistthe
internationalcompetitivenessofthecompanies.Whatseemstobepar-
ticularlyimportantaretheselocationassetswhicharelocation-bound,
wealthcreatinganddeeplyembeddedintheeconomic,culturalandin-
stitutionalenvironmentsofthehostcountry.
ThefindingsreportedinthisresearchindicatethatfdimadebyPolish
investorscontributedtotheircompetitiveness.Nevertheless,theimpact
isnotasexplicitasweexpected.Furthermore,theresearchresultsproved
thatthelocationoftheirforeignaffiliatesdidnotsignificantlyinfluence
thescaleandthenatureofthebenefitsfrominternationalactivitiesbased
ontheChi-squareanalysisapplied.However,wecanobservesometen-
denciesbasedonthepercentagestatisticsthatsuggestthepresenceof
somedependenciesrelatedtothefdilocation.
Accordingtotheresearchresultsbasedonthepercentagestatistics,
thefdiprojectsundertakenbythesurveyedcompaniesimprovedtheir
competitivepotential,howevertheimpactwasratherlow.Infact,wecan
saythatinmanycasesfdiprojectscontributedtomaintainingthecom-
petitivepotential,whichmayprovearelativelyloweffectivenessoffdi
asatoolfordevelopingthecompany’scompetitiveness.However,itmust
benotedthatmaintainingthestatusquoinrelationtothecompetition
thesedaysshouldalsoberecognisedasasuccess.
Ourfindingsalsosuggestthattherewerenostatisticallysignificant
differencesinthefdiimpactasaresultofthelocationoftheaffiliates.
Alllocations,nomatterwhetherdevelopedordevelopingcountries,con-
tributetothecompetitiveadvantageinarelativelysamescale.However,
basedonthepercentageanalysis,wecanobserveaslightlyhigherpos-
itiveimpactinthecaseofcompaniesthatdecidedtolocatetheiraffil-
iatespredominantlyindevelopingcountries.Theexplanationforthese
findingsshouldbesoughtinthenatureofcompetitiveadvantagesrepre-
sentedbyPolishmnesandthegeographicaldistributionoftheirfdiin
developingcountries.Anin-depthanalysisofthefdiprojectsindevel-
opingcountriesrevealsthatnearly90ofthemwerelocatedinCentral
andEasternEurope,wherePolishmnesprobablycanbuildacompet-
itiveadvantagemoreeffectivelythanintheWesternEuropeanmarkets
Volume13·Number2·Summer2015

142 Małgorzata Szałucka
thatconstitutedthebulkofthecategoryofdevelopedcountries.Therea-
sonforthisisthenatureoftheownership-specificadvantagesofPolish
companies,whicharebasedtoalargeextentonhomecountryadvan-
tagesandareperceivedtobemoreappropriatetoCentralandEastern
EuropeanmarketsthanWesternEuropeanones.Oneofthesespecificad-
vantagesmightbebetterpoliticalcapabilitiesastheyareusedtooperate
inweakinstitutionalenvironmentswithunstablegovernments(Cuervo-
CazurraandGenc2008).ThesecapabilitiesmightveryvaluableforPol-
ishcompaniesespeciallyinotherEuropeantransitioneconomies(Bevan,
Estrin,andMeyer2004;MarinovandMarinova2000).Furthermore,the
sizeofCentralandEasternEuropeanmarketsandtheirgrowthpoten-
tial,theculturalandgeographicproximityandthesharedhistoryand
experiencemayfavourPolishmnes,forwhomlocalaccesstomarkets
andnetworksappearsmorestraightforwardthanindevelopedmarkets
(Jaworek2013;Meyer2001;MarinovandMarinova2000).Additionally,
therelativelyundevelopedstructuresofthosemarkets(particularlyin
EasternEuropeancountries),thelimitedbrandpenetrationintheminds
oflocalcustomers(duetotherelativelyshorthistoryoftheopenecon-
omy)aswellasthelowerlevelofcompetitionfromlocalcompaniesmay
alsobeessentialfactorsthatcontributetothebetterpositionofPolish
mnesinthesemarketsandconsequentlygreaterbenefitsfromtheaffili-
ateslocatedthere(Meyer2001).Incontrast,thepositionofPolishmnes
inWesternEuropeanmarkets(whichconstitutealmost98ofthefdi
projectslocatedindevelopedcountries)maybeworsethanthatoflocal
firms,thecompetitiveadvantagesofwhicharebasedonadvancedhome
countryadvantages.DevelopedmarketsofWesternEuropearecharac-
terisedbyahighlevelofeconomicdevelopment,alowergrowthrate,an
intensiveanddemandingcompetition,ahighfocusonadvancedtech-
nologyandinnovation,andstronglocalbrands.Additionally,theimage
ofPolandinWesterncountriesdoesnotalwayssupportPolishmnesin
thosemarkets,althoughthishassignificantlyimprovedinrecentyears.
Consequently,PolishmnesmayfacemoredifficultiesenteringWestern
marketsasopposedtoCentralandEasternEuropeanones.Thismayre-
sultinhighercostsandahigherprobabilityoffailure.Asaresult,the
positiveimpactoftheaffiliateslocatedinWesternEuropemaybelower
thanthatoftheaffiliatesembeddedinCentralandEasternEurope.
Theresearchresultsalsoindicatethatgenerallytherearenostatistically
significantdifferencesinbenefitsfromfdibetweencompanieswiththe
majorityoffdiprojectslocatedindevelopedanddevelopingcountries.
ManagingGlobalTransitions

DoesLocationReallyMatter? 143
Outof39componentsofcompetitivepotential,thefdilocationwassta-
tisticallysignificantinonlytwoinstances.Theresultsdidnotprovideem-
piricalsupportforthehypothesis,thattherearesignificantdifferencesin
thefieldsoffdiimpactoncompetitivepotentialdependingonthefdi
location.TheChi-squareanalysisdidnotallowustoconfirmthatthege-
ographicaldistributionofforeignactivitiesdeterminesthenatureofben-
efitsfromfdi.However,basedontheimpactindexwecanobservesome
trendsthatmayindicateaslightdependencybetweenthefdilocation
andthefieldofthefdiimpact.Theaffiliateslocatedindevelopedcoun-
triesseemtocontributemorethanthoselocatedindevelopingcountries
toimprovingcomponentsofthecompetitivepotentialrelatedtointan-
gibleresources,suchasknowledgeandskillsintheareaoftechnology,
marketing,organisationorfinancemanagement,theleveloftechnology
advancement,qualityassurancesystemsandorganisationalculture.Itis
aconsequenceoftheeconomicenvironmentofferedbythedeveloped
economies,characterisedbylargereadymarkets,highlevelsoflocalcom-
petition,demandingcustomers,highexpenditureonr&d,thepresence
ofdevelopedandmoderninfrastructure,andhightechnologicaldevel-
opment(Jaworek2013).Incontrast,benefitsfromtheaffiliateslocatedin
developingcountriesmainlyreflecttheirsizeandrapidgrowthrates,as
wellastheirculturalandgeographicalproximity,factorsthatcontribute
toimprovingaccesstomarkets,knowledgeandskillsintheareaoflo-
gistics,relationswithsuppliersandtheabilitytogainadvantagesofscale
(Meyer2001;MarinovandMarinova2000).
Althoughthisstudydoesnotindicatearelationshipbetweenlocation
andthenatureofbenefitsderivedfrominternationalactivitywebelieve
thatourfindingsofferinterestinginsightsforfutureresearch.Aninte-
grativeapproachtomotives,ownerships-specificadvantagesandlocation
advantagesisneededtobetterunderstandthefindingsofthisstudy.This
issuewasindirectlysignalledinthepaper,butitrequiresthefurtherem-
piricalresearch.Futureresearchshouldalsotrytoexploremoredeeply
thelocationasavariableaffectingthecompany’sglobalcompetitivead-
vantagefromresource-basedviewofthefirm.Moreover,international
businessresearchcouldbenefitfromcross-countrycomparisonstudiesto
identifythedifferencesinthenatureoffdibenefitsbetweenthecompa-
niesfromceeregionordevelopedanddevelopingcountries.Finally,the
interpretationofthisstudy’sfindingsneedstobedoneinconsiderationof
severallimitations.Duetothesmallsampleofcompaniessurveyedand
thenon-probabilitysampleselectionappliedinthestudy,thefindings
Volume13·Number2·Summer2015

144 Małgorzata Szałucka
shouldbeinterpretedwithcautionanddescribedonlyintermsofsome
initialindications.Theresearchhypothesiscanbeconceivedasapointer
forfutureresearchbasedonlargerandmorerepresentativesamplewhere
moreobjectivebasedmeasurescouldbeapplied.
Acknowledgments
Theresearchwascarriedoutasapartoftheresearchprojectgrantedby
TheMinistryofScienceandHigherEducationNo.NN112322338.There-
searchteamcomposedofW.Karaszewski(director),M.Jaworek,M.Kuzel,
M.Szałucka,A.Szóstek,andM.Kuczmarska.
Notes
1 Thedivisionofthecountriesintodevelopedanddevelopingcountrieswas
madeaccordingtotheclassificationusedbyWorldInvestmentReports
publishedbyunctad(2013).However,forthepurposeofthisarticlewe
decidedtoslightlymodifythetwocategoriesofcountriestobetterreflect
twodifferentdirectionsofPolishfdithataremainlylocatedinEurope.
Wedecidedtoincludeinthecategoryofdevelopingcountriesthenew
memberstatesoftheEuropeanUnion:Bulgaria,Cyprus,CzechRepublic,
Estonia,Lithuania,Latvia,Malta,Romania,Slovakia,SloveniaandHun-
gary(asimfstilldoesinitsclassification).Ontheotherhand,thegroup
ofthedevelopedcountrieswasexpandedtoincludeSingaporeandSouth
Korea.
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