Tracking the Effects of Foreign Investment in Spain: A comparative analysis


  • Núria Puig Raposo
  • Adoración Álvaro Moya



Foreign Investment, Economic Development, Business Strategies


This article examines Foreign Direct Investment (FDI) long-term effects on host economies, focusing on the role played by the entry mode chosen by foreign investors and the local economic and institutional framework. It does so looking at the largest companies investing in
Spain, a traditional net importer of capital, coming from the two leaders of the Second Industrial Revolution, Germany and the United States, between the late 19th century and 1975. We can observe that the entry mode chosen by the multinationals of both countries changed accordingly
with Spanish economic evolution, but, contrary to what happened in other European countries, strategic alliances were persistently pursued as a response to both economic nationalism and very active local entrepreneurship. We conclude that these alliances’ resilience not only explains the continuity of foreign investments in spite of increasing governmental restrictions, but also created a path of dependency which favoured fruitful interaction of foreign companies’ expatriates and local managers with Spanish professional and educational institutions.