FDI by Early Movers, Followers and Latecomers: Timing of Entry by German Firms during Transition in the Czech Republic
AbstractTheoretical considerations suggest that the option of waiting under conditions of uncertainty affects the relative importance of firm-level productivity and distance-related transaction costs as driving forces of FDI. Yet the timing of FDI has received little attention in the empirical literature on FDI determinants. To help close this gap we analyze FDI decisions by German firms with and without affiliates in the Czech Republic at different stages of transition. We find that FDI entry strongly depends on firm productivity immediately after the political and economic regime change, but less so with diminishing uncertainty. Likewise, distance-related transaction costs discourage FDI by latecomers considerably less than FDI by early movers
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Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1571.
Length: 46 pages
Date of creation: Nov 2009
Date of revision:
multinational enterprises; firm-level productivity; distance; timing of FDI;
Other versions of this item:
- Henning M�hlen & Peter Nunnenkamp, 2011. "FDI by early movers, followers and latecomers: timing of entry by German firms during transition in the Czech Republic," Applied Economics Letters, Taylor and Francis Journals, vol. 18(18), pages 1729-1734, December.
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
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