Factors Determining Foreign Direct Investment in the Services Sector: The Case of Spain

Using a gravity model augmented with institutional quality and sectoral heterogeneity variables, this study analyses 2000–2022 inward FDI determinants in Spain’s services sector. Market size, labour productivity, and regulatory stability emerge as dominant pull factors, while language affinity explains Latin American investment flows. The work demonstrates the sector-specific nature of FDI determinants, with direct implications for investment promotion policy.