In the present study, it was hypothesised that place brand image is an important soft factor in FDI attraction (H1). As was indicated in the preceding chapter, it can be stated that this hypothesis is supported whereby place brand image significantly influences FDI attraction (β=0.434, t=3.11, p<0.01). Thus, this research has uncovered empirical proof that there is an influence of place brand image on FDI attraction. This result is contributing to a growing body of research that is exploring the importance of place brand image on FDI attraction. For instance, this result is aligned with the results outlined by Kalamova and Konrad (2010), Metataxas (2010), Metaxas and Petrakos (2004), Vuignier (2017), and Papadopoulos and Heslop (2002).
For instance, Kalamova and Konrad (2010) demonstrate the impact of place brand image in attracting FDI and that FDI flows increase as the image and value of the location's intangibles improve. According to Metaxas and Petrakos (2004), a location must assure its competitiveness in order to attract FDI. Furthermore, Metataxas (2010) analyses how the internationalized environment has influenced regional branding. Local governments have made efforts to boost their region's image and attractiveness as a result of the advantages of foreign direct investment. Foreign direct investment therefore has an effect on the branding
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of localities in order to boost their attractiveness to investors. Thus, a location's image may be seen as a crucial "soft" or "intangible" aspect in FDI appeal. Numerous governments and towns have made campaigns to brand their locations in order to attract overseas investment (Papadopoulos and Heslop, 2002). According to Vuignier (2017), research on place branding and its relationship to FDI promotion has gotten less attention in comparison to tourism, labour, and resident attractiveness. Thus, this research is also filling this research gap.
One of the potential reasons for why place brand image influences FDI attraction is by influencing stakeholder perceptions of nature of the place which can aid in the stakeholders’ decisions about whether to invest in the country or not (Henninger et al., 2016).
The goal of branding is to showcase what sets the location apart from its rivals (Konecnik &
Go, 2008). Reassurance for potential investors regarding service and product quality is offered by strong rivalry amongst country brands; it also helps to create alternatives with varying degrees of quality to meet the demands and preferences of visitors from all over the world (Shao et al., 2016). Furthermore, the nation brand must be credible, recognizable, and enthused by the provider in order to successfully create an emotional relationship with consumers. It should also reverberate with visitors (Manhas et al., 2016). To decouple oneself from all other places, a place must be able to sell itself using positive image production (Ekinci, 2003). As places become more well-known, imaginative promotion and development in critical services and amenities are necessary to ensure their sustainability (Ristano, 2005; Manhas et al., 2016). A powerful national identity should also encourage corporate investments, and promote the needs of export sectors (Moilanen and Rainisto, 2008).
From a global viewpoint, effective place branding needs a fusion of many values.
These values span from distinct local conceptions of location, such as history, culture, and customs, to more strategic national objectives (Musterd and Kovács, 2013). What's critical to remember here is that, while national and global strategies consider the big perspective when it comes to place branding, local authority decision makers have the most impact over the marketing strategy, making their comprehension of place branding critical for better consequences (Björner, 2014). This engagement also enables towns to place a high value on physical aspects that adhere to transnational norms in an effort to differentiate oneself from established megacities (Björner, 2014). Place branding and its success are built on the distinctiveness of a city. If done incorrectly, this might result in a city which lacks its own distinctiveness. This dilemma is widely discussed in the literature on place brand and
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illustrates what occurs when a city seeks to comply to worldwide and international aesthetic and functional criteria while still attempting to differentiate itself via its own local characteristics (Pasquinelli, 2014).
Directly or indirectly, perceptions and preconceptions may influence investors' location selections (Kalamova and Konrad, 2010). In light of the vast amount of research on people's perceptions of other nations and their commodities, it is clear that almost all types of "consumers," including buyers, manufacturing bidders, travellers, retail chains, multinational vendors, and investment firms, are impacted by their preconceptions of international markets.
More nations are using place branding, and study into the concept is expanding to take advantage of this rising necessity to position oneself globally in an extremely competitive context. However, although national branding is widely used and researched in sectors like tourism and shipping, little research has been done on the function of immaterial variables in the economy, particularly in terms of their potential influence on inbound FDI.
Study after study has shown that investors' judgments are influenced by a country's public reputation, and this is despite the findings of Kalamova et al. (2010), which revealed that the higher the nation's image, the more overseas investment a nation might acquire. Thus, this research is bridging this gap and identifying empirical evidence of the impact of place branding on FDI attraction.
Due to the worldwide competition for corporate investment, place brands are an essential component of economic expansion plans at the national and regional levels. Not only are place branding an effective strategy for attracting and retaining company, but they also help to portray the location as more business-friendly. The credibility of a community that develops a place brand will be greatly enhanced. Boosting the local economy by recruiting enterprises to the area strengthens the place brand by expanding the amount of promoted commodities and, at the same time, developing a place brand of positive investment. As the company expands in size, the neighbourhood will become more appealing to investment firms by conveying the message of being a desirable area to conduct business (Cleave et al., 2016).
Florida (2002) and Jansson and Power (2006) state that communities that have established strong brands would have an easier time enticing knowledge-based businesses to their areas of residence. While Pantzalis and Rodriguez (1999) claimed that brand awareness of a location has a significant effect on capital mobility and Jansson and Power
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(2006) found evidence to support this claim, both authors agreed that brand awareness plays an essential part in the battle to attract investors. While Jacobsen (2009) shared the same idea, he also formulated the theory to explain how location-based marketing influences investing decisions. Place brands have a significant impact on how local consumers behave, which means that the choice of whether or not to engage in a location is impacted by place brands. Metaxas (2010) advanced this theory, that was supported by study undertaken in Lucbeck (Germany), that found that location brands had a beneficial impact on the choice to participate in the cultural economy (Jacobsen, 2012).
According to Chernatony and Dall'Olmo Riley (1998), a brand is a multifaceted construct that encompasses not only what a company does, but also what people think about it. The brand acts as a bridge between these two aspects, facilitating communication between them. Numerous features may be seen both on the outside and inner edges of the brand's architecture. In addition to these traits and helpful characteristics, strategists can opt to emphasize the brand's metaphorical, sensory, emotional and behavioral qualities (Chernatony and Dall'Olmo Riley, 1998) which assist in creating the brand persona as well.
This is not enough to promote the brand on its own, nevertheless, since every brand is tied to the user's quality perception and significance in the commodity. To be successful, a company must engage in a two-way dialogue with its customers. This is where branding comes in (Morgan et al., 2002). The idea of the brand is based on the user's judgments of excellence and principles, as well as product attributes and sentiments, and the brand image is important to this concept. Brand management must carefully consider this interplay between the two components of the branding strategy and strive to regulate it.
Therefore, the study has demonstrated that the "soft" or "intangible" aspects of a place's image have a significant role in FDI attraction. Local governments have initiated initiatives to brand their localities in order to attract outside investment. With branding, you're aiming to show off what makes your business unique in comparison to the competition. Effective place branding demands a confluence of several values. These values vary from diverse local perceptions of place, such as history, culture, and traditions, to more strategic national aims.
The uniqueness of a city serves as the foundation for successful place branding. If done wrong, this may result in a city missing its unique character. The greater the country's image, the more international investment a nation may gain. Economic development strategies at the national and regional levels cannot be complete without the use of place
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branding. Not only are place branding effective technique for recruiting and maintaining companies, they also assist depict the site as business-friendly. Brand awareness plays a vital aspect in the effort to recruit investors. Place brands have a big influence on how local customers behave, which implies that the option of whether or not to interact in a location is affected by place brands. Brand management must carefully evaluate this interaction between the two components of the branding strategy.