Exploring the impact of city image on foreign direct investment perception: The case of Dubai

Abstract

Even though researchers have undertaken studies in the Middle East to analyse investor behaviour and decision-making among various investor groups, including emphases on socially responsible investments, no study to date provides a comprehensive explanation of the influence of city image in the Middle Eastern context on investor perception and consequent foreign direct investor (FDI) decision-making. This research problem is addressed in this study with a focus on the hospitality and tourism and higher education sectors. The research aim of this study is to explore the impact of city image on FDI perceptions and FDI decision-making. Some key factors uncovered in the literature review that affect city image include the political environment, the prevailing government strategy and the legal environment, technological, economic and socio-cultural environments. The focus on the higher education and tourism and hospitality sectors in Dubai for exploring the impact of city image on FDI perceptions and ultimately FDI decision-making is based on a gap in the literature. Through primary research in the form of interviews and comparison of the resulting data with the findings in the literature, new factors affecting the city image and FDIs’ perception of Dubai are added to the existing conceptual framework. In order to improve Dubai’s city image and attract more FDIs, the first recommendation is creating an environment that is conducive to higher education to increased subsidies and grants for students aiming to complete higher education programmes. The second recommendation relates to the economic environment, which requires close interaction between the Government of Dubai and the Central Bank of the UAE, because the central bank controls monetary policy.