Institutional Reform and FDI Locational Decision in Transition Economies:The Case of Syria

This paper recognises and responds to two major gaps in previous studies on the locational determinants of FDI in transition economies. These are contextual and methodological gaps. In response to the contextual gap, the paper develops the borders of previous research by considering the impact of institutional reform on the locational decision of FDI in transition economies within Syria, which has not been explored empirically hitherto. As regards the methodological gap, the study contributes an open and flexible qualitative research design that can go beyond the borders of the quantitative findings of previous econometric research. The findings reveal that institutional reforms enhanced Syria’s attractiveness to FDI. Yet, further steps are needed to overcome remaining problems in the Syrian institutional investment environment. These problems proved to be less daunting to foreign investors whose backgrounds are culturally close to that of Syria and/or already had experience in Syria or in a similar type of economy.