Advanced Search
MyIDEAS: Login to save this paper or follow this series

The Role of Country-of-origin Characteristics for Foreign Direct Investment and Technical Cooperation in Post-reform India

Contents:

Author Info

  • Axel Dreher
  • Peter Nunnenkamp
  • Krishna Chaitanya Vadlamannati

Abstract

The decisions of foreign investors on technical cooperation versus equity engagements and on the degree of ownership in FDI projects are likely to depend on their relative bargaining position vis-à-vis the host country. India provides an interesting case for analyzing the interplay between country-of-origin characteristics and host-country characteristics and their respective effects on ownership decisions since opening up its economy to FDI in the early 1990s. We perform negative binominal regressions by making use of a unique dataset on about 24,500 technical cooperation and FDI projects by investors from 45 countries of origin over the 1991-2004 period. We find that relative market size, relative financial market development, relative risk, relative endowment of human capital and previous international experience significantly affect the type of engagement by foreign investors in post-reform India

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: https://www.ifw-members.ifw-kiel.de/publications/the-role-of-country-of-origin-characteristics-for-foreign-direct-investment-and-technical-cooperation-in-post-reform-india/working-paper-1708.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1708.

as in new window
Length: 33 pages
Date of creation: Jun 2011
Date of revision:
Handle: RePEc:kie:kieliw:1708

Contact details of provider:
Postal: Kiellinie 66, D-24105 Kiel
Phone: +49 431 8814-1
Fax: +49 431 85853
Email:
Web page: http://www.ifw-kiel.de
More information through EDIRC

Related research

Keywords: foreign investors; countries of origin; joint ventures; technical cooperation; India;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Xiaming Liu & Haiyan Song & Yingqi Wei & Peter Romilly, 1997. "Country characteristics and foreign direct investment in China: A panel data analysis," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 133(2), pages 313-329, 06.
  2. Witold J. Henisz, 2002. "The institutional environment for infrastructure investment," Industrial and Corporate Change, Oxford University Press, vol. 11(2), pages 355-389.
  3. Cushman, David O, 1985. "Real Exchange Rate Risk, Expectations, and the Level of Direct Investment," The Review of Economics and Statistics, MIT Press, vol. 67(2), pages 297-308, May.
  4. Schnitzer, Monika, 1997. "Debt vs. Foreign Direct Investment: The Impact of Sovereign Risk on the Structure of International Capital Flows," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1608, C.E.P.R. Discussion Papers.
  5. Müller, Thomas & Schnitzer, Monika, 2003. "Technology Transfer and Spillovers in International Joint Ventures," Discussion Papers in Economics, University of Munich, Department of Economics 93, University of Munich, Department of Economics.
  6. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, Elsevier, vol. 80(1), pages 123-129, July.
  7. Matthias Busse & Carsten Hefeker & Signe Nelgen, 2010. "Foreign Direct Investment and Exchange Rate Regimes," MAGKS Papers on Economics, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung) 201015, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  8. Konrad, K.A. & Lommerud, K.E., 2001. "Foreign Direct Investment, Intra-firm Trade and Ownership Structure," Norway; Department of Economics, University of Bergen, Department of Economics, University of Bergen 219, Department of Economics, University of Bergen.
  9. Yeaple, Stephen & Helpman, Elhanan & Melitz, Marc, 2004. "Export versus FDI with Heterogeneous Firms," Scholarly Articles 3229098, Harvard University Department of Economics.
  10. Jonathan Temple, 1999. "The New Growth Evidence," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 37(1), pages 112-156, March.
  11. Scaperlanda, Anthony E & Mauer, Laurence J, 1969. "The Determinants of U.S. Direct Investment in the E.E.C," American Economic Review, American Economic Association, American Economic Association, vol. 59(4), pages 558-68, Part I Se.
  12. Kobrin, Stephen J., 1987. "Testing the bargaining hypothesis in the manufacturing sector in developing countries," International Organization, Cambridge University Press, Cambridge University Press, vol. 41(04), pages 609-638, September.
  13. William H. Greene, 2009. "Testing Hypotheses About Interaction Terms in Nonlinear Models," Working Papers, New York University, Leonard N. Stern School of Business, Department of Economics 09-08, New York University, Leonard N. Stern School of Business, Department of Economics.
  14. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, Elsevier, vol. 104(C), pages 184-198.
  15. Svejnar, Jan & Smith, Stephen C, 1984. "The Economics of Joint Ventures in Less Developed Countries," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 99(1), pages 149-67, February.
  16. Ellen, Saskia ter & Zwinkels, Remco C.J., 2010. "Oil price dynamics: A behavioral finance approach with heterogeneous agents," Energy Economics, Elsevier, Elsevier, vol. 32(6), pages 1427-1434, November.
  17. Jose Brandao de Brito & Felipa de Mello Sampayo, 2005. "The timing and probability of FDI: an application to US multinational enterprises," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 37(4), pages 417-437.
  18. Chris Doyle & Sweder Wijnbergen, 1994. "Taxation of foreign multinationals: A sequential bargaining approach to tax holidays," International Tax and Public Finance, Springer, Springer, vol. 1(3), pages 211-225, October.
  19. Dunning, John H, 1979. "Explaining Changing Patterns of International Production: In Defence of the Eclectic Theory," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, Department of Economics, University of Oxford, vol. 41(4), pages 269-95, November.
  20. Stephen B Tallman, 1988. "Home Country Political Risk and Foreign Direct Investment in the United States," Journal of International Business Studies, Palgrave Macmillan, Palgrave Macmillan, vol. 19(2), pages 219-234, June.
  21. Peter Nunnenkamp & Julius Spatz, 2004. "Intellectual property rights and foreign direct investment: A disaggregated analysis," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 140(3), pages 393-414, September.
  22. Görg, Holger & Mühlen, Henning & Nunnenkamp, Peter, 2010. "FDI liberalization, firm heterogeneity and foreign ownership: German firm decisions in reforming India," Proceedings of the German Development Economics Conference, Hannover 2010, Verein für Socialpolitik, Research Committee Development Economics 35, Verein für Socialpolitik, Research Committee Development Economics.
  23. Mihir A. Desai & C. Fritz Foley & James R. Hines, Jr., 2002. "The Costs of Shared Ownership: Evidence from International Joint Ventures," NBER Chapters, National Bureau of Economic Research, Inc, in: Corporate Alliances National Bureau of Economic Research, Inc.
  24. Beata Javorcik & Mariana Spatareanu, 2006. "To Share or Not To Share: Does Local Participation Matter for Spillovers from Foreign Direct Investment?," Working Papers Rutgers University, Newark, Department of Economics, Rutgers University, Newark 2006-001, Department of Economics, Rutgers University, Newark.
  25. Yigang Pan & David K Tse, 2000. "The Hierarchical Model of Market Entry Modes," Journal of International Business Studies, Palgrave Macmillan, Palgrave Macmillan, vol. 31(4), pages 535-554, December.
  26. J Bradford Jensen & Andrew B Bernard, 2001. "Why Some Firms Export," Working Papers, Center for Economic Studies, U.S. Census Bureau 01-05, Center for Economic Studies, U.S. Census Bureau.
  27. Robert Grosse & Len J Trevino, 1996. "Foreign Direct Investment in the United States: An Analysis by Country of Origin," Journal of International Business Studies, Palgrave Macmillan, Palgrave Macmillan, vol. 27(1), pages 139-155, March.
  28. Pauly, Louis W. & Reich, Simon, 1997. "National structures and multinational corporate behavior: enduring differences in the age of globalization," International Organization, Cambridge University Press, Cambridge University Press, vol. 51(01), pages 1-30, December.
  29. Christian Schmidt & Udo Broll, 2009. "Real exchange-rate uncertainty and US foreign direct investment: an empirical analysis," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 145(3), pages 513-530, October.
  30. Barbara M. Roberts & Abdulaziz Almahmood, 2009. "Source Country Characteristics and the Inflow of Foreign Direct Investment into Saudi Arabia," The World Economy, Wiley Blackwell, Wiley Blackwell, vol. 32(12), pages 1730-1746, December.
  31. Peter Nunnenkamp & Rudi Stracke, 2008. "Foreign Direct Investment In Post-Reform India: Likely To Work Wonders For Regional Development?," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, Chung-Ang Unviersity, Department of Economics, vol. 33(2), pages 55-84, December.
  32. Kulwindar Singh, 2005. "Foreign Direct Investment in India: A Critical Analysis of FDI from 1991-2005," Development and Comp Systems, EconWPA 0511013, EconWPA.
  33. Pan, Yigang, 2003. "The inflow of foreign direct investment to China: the impact of country-specific factors," Journal of Business Research, Elsevier, Elsevier, vol. 56(10), pages 829-833, October.
  34. World Bank, 2010. "World Development Indicators 2010," World Bank Publications, The World Bank, number 4373, August.
  35. Nigel Pain & Desirée Van Welsum, 2003. "Untying The Gordian Knot: The Multiple Links Between Exchange Rates and Foreign Direct Investment," Journal of Common Market Studies, Wiley Blackwell, Wiley Blackwell, vol. 41(5), pages 823-846, December.
  36. Elizabeth Asiedu & Hadi Salehi Esfahani, 2001. "Ownership Structure In Foreign Direct Investment Projects," The Review of Economics and Statistics, MIT Press, vol. 83(4), pages 647-662, November.
  37. Yigang Pan, 2002. "Equity Ownership in International Joint Ventures: The Impact of Source Country Factors," Journal of International Business Studies, Palgrave Macmillan, Palgrave Macmillan, vol. 33(2), pages 375-384, June.
  38. Tolentino, Paz Estrella, 2008. "The determinants of the outward foreign direct investment of China and India: Whither the home country?," MERIT Working Papers, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) 049, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  39. Kobrin, Stephen J., 1980. "Foreign enterprise and forced divestment in LDCs," International Organization, Cambridge University Press, Cambridge University Press, vol. 34(01), pages 65-88, December.
  40. Schnitzer, Monika, 1999. "Expropriation and control rights: A dynamic model of foreign direct investment," Munich Reprints in Economics, University of Munich, Department of Economics 19890, University of Munich, Department of Economics.
  41. Satomi Kimino & David S. Saal & Nigel Driffield, 2007. "Macro Determinants of FDI Inflows to Japan: An Analysis of Source Country Characteristics," The World Economy, Wiley Blackwell, Wiley Blackwell, vol. 30(3), pages 446-469, 03.
  42. Gorg, Holger & Wakelin, Katherine, 2002. "The Impact of Exchange Rate Volatility on US Direct Investment," Manchester School, University of Manchester, University of Manchester, vol. 70(3), pages 380-97, June.
  43. Thomas, Douglas E. & Grosse, Robert, 2001. "Country-of-origin determinants of foreign direct investment in an emerging market: the case of Mexico," Journal of International Management, Elsevier, Elsevier, vol. 7(1), pages 59-79.
  44. Gatignon, Hubert & Anderson, Erin, 1988. "The Multinational Corporation's Degree of Control over Foreign Subsidiaries: An Empirical Test of a Transaction Cost Explanation," Journal of Law, Economics and Organization, Oxford University Press, Oxford University Press, vol. 4(2), pages 305-36, Fall.
  45. Bond, Eric W. & Samuelson, Larry, 1989. "Bargaining with commitment, choice of techniques, and direct foreign investment," Journal of International Economics, Elsevier, Elsevier, vol. 26(1-2), pages 77-97, February.
  46. Blonigen, Bruce A, 1997. "Firm-Specific Assets and the Link between Exchange Rates and Foreign Direct Investment," American Economic Review, American Economic Association, American Economic Association, vol. 87(3), pages 447-65, June.
  47. Jennifer Tobin & Susan Rose-Ackerman, 2011. "When BITs have some bite: The political-economic environment for bilateral investment treaties," The Review of International Organizations, Springer, Springer, vol. 6(1), pages 1-32, March.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Frank Bickenbach & Wan-Hsin Liu & Peter Nunnenkamp, 2013. "Regional Concentration of FDI in Post-reform India: A District-level Analysis," Kiel Working Papers, Kiel Institute for the World Economy 1854, Kiel Institute for the World Economy.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:kie:kieliw:1708. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dieter Stribny).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.