Sample Essay

Features of economic conditions in the country are also important factors determining the location of FDI. Capital, human and natural resources such as labor inChinaand oil inNigeriawill continue to be a significant impact on FDI location choice. The importance of neo-classical factors of production (eg land, labor, capital, raw materials) to select the MNCs FDI location is consistent with the predictions of the theory of location.

Factors of production can be internal or created. (Cooke 1998) Areas of Silicon Valleyget a large inflow of FDI partly because of the quality of its human capital. Geographically concentrated pool of human capital emerged, in particular, the presence of the front edge of domestic companies and the entry of foreign companies. Thus, specialized labor in Silicon Valley can be regarded as established and dynamic factor of production: Established in the sense that high-tech workers have developed their knowledge through their experience in variousSilicon Valleyfirms, (Williamson 1991)the dynamic in the sense that the entry of more companies in the area expanded set of skills and expansion of specialized labor.

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