Internationalization, Distance Barriers and Home Country Size, Lessons from the World Investment Report 2005

Once a year the International Investment Report publishes a list of the one hundred leading Transnational Enterprises. The list, whose composition changes little from year to year, makes for fascinating reading. This article provides an analysis of the World Investment Report of 2005, focusing on the relationship between the size of the country and the level of internationalization of its firm. It is demonstrated how important the Distance Premium (DP) is in the understanding of spatial distribution of MNEs.