in recent decades, there has been an increasing interest in FDI, and an increasing debate on its modelling in terms of variables considered as determinants, model specification and methods for estimating the FDI gravity model. This is due to the uncertainty surrounding both theories and empirical approaches to FDI. This Doctoral Tesis aims to contribute to literature by researching the driving forces of NEMs’ activities to and from European countries, both at regional and national level, addressing the problems of selecting variables and uncertainty of the model they face when modelling FDI. We focus on the European Union due to the growth of intra-EU investments triggered by the Single Market. In particular, we focus on the cases of Spain and Germany, as they represent one of the largest recipient countries and investors of FDI within the EU, respectively. The Tesis is structured in three chapters. Chapter 2 focuses on the modelling of FDI from a regional perspective by investigating the determinants of FDI in Spanish regions for the period 2004-2013. We implement an exploratory factorial analysis to avoid the colinearity problem that arises by considering as returns an ad hoc set of FDI determinants presented by the literature. We then estimate a widespread gravity model using the Poisson Maximum Verosimilarity Estimate (PPML) with fixed effects from the country of origin. Our results show that FDI localisation strategies in Spanish regions are significantly determined by the factor Competitiveness and agglomeration effects, and to a lesser extent by the factors Productive Capacity and Economic Potential. Therefore, empirical analysis shows that at regional level FDI is not the search for markets but the search for efficiency. In addition, we found that inward FDI in Spanish regions is highly determined by the degree of industrial specialisation and geographical location of the regions. Finally, we confirm that FDI stock data are more appropriate than flows to approximate long-term FDI distribution patterns. The two subsequent chapters deal with the modelling of FDI at national level by analysing the long-term determinants of Germany’s outward FDI. Chapter 3 addresses the problem of selecting variables by adopting a Bayesian Model Averaging (Bayesian Model Averaging; BMA). The analysis is carried out for 59 recipient countries disaggregated by country groups to avoid so-called aggregation bias for the period 1996-2012. Our results show that the determinants associated with market search or horizontal FDI are relatively more important in developed countries; while those related to vertical FDI predominate in developing countries. Within developing countries, our results show that both horizontal and vertical FDI strategies coexist alongside institutional factors in Latin American and Asian countries. However, FDI in search for markets seems to prevail in Asian countries; while FDI in search for efficiency plays a key role in Latin American countries. As regards the European Union, while most FDI is market-oriented in central countries, the motivations for vertical FDI predominate in peripheral countries. In addition, our results are compatible with the complex integration strategies of NMSs where the determinants for vertical FDI and institutional variables are gaining prominence together with the key role that Germany currently plays in the network of global value chains. Finally, Chapter 4 addresses the uncertainty in the econometric specification of the FDI gravity model by comparing several Generalised Linear Models (Generalised Linear Models; GLMs): Pseudo Maxima Verosimilarity of Poisson (PPML), pseudo Maxima Verosimilarity of Gamma (GPML), pseudo Maxima Verosimilarity of Negativa Binomial (NBPML) and GLM with gaussiana distribution (Gaussian GLM). We follow a model selection approach based on several bona fide statistics and graphic techniques, and we found that NBPML is the best estimator for our database, followed by GPML. The analysis provides comprehensive empirical evidence of the determinants of Germany’s outward FDI by group of countries. Overall, the results of this doctoral thesis allow us to draw some policy implications related to the factors that need to be emphasised in order to attract FDI at both regional and national level.