ribution of foreign direct investment should reflect the location advantages of host countries, rather than their geographical proximity to a home country. While geographical factors are certainly important, other location advantages include the host country's natural endowments, its infrastructure and human resources, as well as those aspects of its policy environment which impact foreign direct investment.""Such factors are considered to be a primary determinant of why transnational corporations, once having decided to invest abroad, will invest in one host country as opposed to another.""A geographically-based pattern of foreign direct investment WOULD NOT BE EXPECTED TO OCCUR, since the type of foreign direct investment that transnational corporations wish to undertake, rather than a corporation's country of origin, should determine the relevant location advantages of a host country"...Thus, "no single Triad member would be expected to emerge as the dominant investor in a particular host country"."However, other factors may play a role in the distribution of worldwide investment flows, which might lead to the concentration of foreign direct investment by a single Triad member in a given host country. These include cultural, historical, commercial and political links between home and host countries". (UNCTAD, World Investment Report,1991)Therefore, clusters could be utilized, as in colonial times, to protect the trade of one colonial power against the encroachment of other colonial powers in the "former's territory".UNCTAD comments: "the formation of a regional free-trade area with one of the Triad members at its core could, hypothetically, also lead to a pattern in which foreign direct investment from the Triad member would predominate in other countries within its free-trade area. This might occur if the regional integration programme, as designed by its members,incorporates measures that discriminate against firms from outsidethe ...
