A Simulated Annealing Approach to Understanding which Regions Matter for Explaining MNC Location

International business research has long acknowledged the importance of regional factors for foreign direct investment (quot;FDIquot;) by multinational corporations (quot;MNCsquot;). However, significant differences when defining these regions obscure the analysis about how and why regions matter. In response, we develop and empirically document support for a framework to evaluate alternative regional grouping schemes. We demonstrate application of this evaluative framework using data on the global location decisions by US-based MNCs in four alternative regional grouping schemes. We conclude with a discussion of implications for future research related to understanding the impact of country groupings on MNC FDI decisions