Cultural logic of German foreign direct investment (FDI) in service sector

Major studies on FDI looks at location, technology, policy, availability of natural resources, skilled labor, state support, climate, political and economic advantages for investment decisions. There are few studies that look at cultural factors affecting FDI decisions in service. This paper provides qualitative analysis of the impact of national culture on the flow of foreign direct investment in the service sector within the context of Germany. In particular, the paper discusses the cultural logic of German foreign direct investment in the service sector. It argues that inward FDI in the service sector was actually substantially more affected by cultural distance compared to outward FDI. The study finds that it is important to distinguish between inward and outward FDI to assess the cultural logic of German FDI in the service sector.