Determinants of Foreign Direct Investment: An analysis of Japanese Investment in Ireland using the Kano model

This paper presents findings from an analysis of the location-specific foreign direct investment (FDI) factors that attract Japanese multinational companies (MNCs) to Ireland. Data was collected from 11 Japanese MNCs and 2 support agencies using a structured Kano model in order to differentiate levels of satisfaction with, and relative importance of, 23 FDI attributes generated from the literature. Our findings reveal that Ireland's low corporate tax rate is the most important determinant for Japanese MNCs to invest in Ireland followed closely by the presence of a skilled workforce. While government's role in maintaining stability and the ability to access to large regional markets were found to be imperative, we learned that the nature of the domestic market was not important at all to Japanese investors. We also found that interconnected clusters of FDI factors are influential to Japanese investors when investing in Ireland thus providing a new lens to policymakers.