Amazon’s HQ2 Site Selection Criteria: The New ‘Gold Standard’ in FDI Decision-Making

Abstract

In 2017–2018, Seattle-based Tech behemoth Amazon executed a highly publicised location-finding process for a $5 billion investment project, dubbed ‘HQ2’. Owing to the combination of high investment volume and the company’s unique public exposure, the HQ2 process is on course to becoming a basic yardstick for future foreign direct investment (FDI) projects all over the world. This article compiles the company’s previously unpublished site selection criteria and develops an evidence-based system of investment decision arguments which is employed to test the currently dominant approaches in location decision theory—behavioural, neoclassical, and institutional. Our results identify gaps vis-à-vis this emerging ‘Gold Standard’ and we propose the addition of a fourth, project-oriented approach to theory to fill the detected shortcomings. Furthermore, this system equips policymakers with a tool to evaluate their investment attraction strategies based on the decision criteria extracted from the HQ2 process.

Keywords

• amazon
• economic policy
• foreign direct investment
• hq2
• impact assessment
• local economic development
• location decision
• policy
• urban development