Foreign direct investment in the hospitality industry in Iceland and Norway, in comparison to the Nordics and a range of other OECD countries

ABSTRACT

International hospitality investment is a key indicator of tourism's growing importance, and the question is what drives the investment. This research compares Iceland and Norway to the Nordic countries, and a range of OECD countries. The research establishes through econometric modeling how foreign direct investment in the hospitality industry is driven by factors such as economic and market size of the headquarters home country, value added tax increase, and skilled labor of the headquarters home country, compared to that of the host country. Increased understanding on the determining factors of this growth from a range of available metrics will inform tourism management both from an entrepreneurial and public policy perspective. The paper concludes by outlining how and which factors should be monitored in order to guide investment in the hospitality industry of rapidly emerging destinations.

KEYWORDS:

• Foreign direct investment
• hospitality industry
• economic geography
• international economics

Acknowledgements

I wish to thank for helpful comments by Elisa Contryman Stead and Vilborg Júlíusdóttir. Valuable comments were also provided by Pétur Örn Sigurðsson at the Central Bank of Iceland

Disclosure statement

No potential conflict of interest was reported by the author(s)

Notes on contributor

Dr. Helga Kristjánsdóttir Ph.D. completed an MBA from Boston College USA in 1995, and MS in economics from the Katholieke Universiteit Leuven Belgium in 2000. She obtained Ph.D. in economics at the University of Iceland in 2004, involving research at CAM and EPRU at Copenhagen University in 2001–2003. Helga has worked as an economist for The Icelandic Tourism Research Centre, and prior to that as a stock broker and in management consultancy. Helga’s teaching experience includes classes in international economics, statistics and energy economics at the undergraduate and graduate levels. Her research covers publication of several papers in peer international journals. Her peer publications are within the framework of International Economics, applying the New Trade Theory and the New Economic Geography to explain international flows of investments and exports, including explanation of tourist flows as indirect exports in national accounts.

ORCID

Helga Kristjánsdóttir http://orcid.org/0000-0002-8857-8063

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.