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Ownership Choices of Indian Direct Investors: Do FDI Determinants Differ between Joint Ventures and Wholly-owned Subsidiaries?

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  • Peter Nunnenkamp
  • Maximiliano Sosa Andrés

Abstract

Using count data on Indian joint ventures (JVs) and wholly owned subsidiaries (WOS), we present an empirical analysis of FDI-related ownership choices and their relation with host country characteristics and indicators of transaction costs. Our Negative Binomial regression models offer only weak support for the bargaining perspective, according to which JVs should be more likely if the host countries were particularly attractive in terms of market access or resource endowments. Geographical and cultural distance has ambiguous effects on the choice between JVs and WOS. The composition of FDI projects tends to shift toward WOS where investment risks are contained by bilateral treaties and better control of corruption

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Bibliographic Info

Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1841.

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Length: 37 pages
Date of creation: May 2013
Date of revision:
Handle: RePEc:kie:kieliw:1841

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Keywords: outward FDI; ownership choices; transaction costs; host country characteristics; India;

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  1. Sosa Andrés, Maximiliano & Nunnenkamp, Peter & Busse, Matthias, 2012. "What drives FDI from non-traditional sources? A comparative analysis of the determinants of bilateral FDI flows," HWWI Research Papers 114, Hamburg Institute of International Economics (HWWI).
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Cited by:
  1. Schrader, Klaus & Bencek, David & Laaser, Claus-Friedrich, 2013. "IfW-Krisencheck: Alles wieder gut in Griechenland?," Kiel Discussion Papers 522/523, Kiel Institute for the World Economy (IfW).

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