Firm-Level Relationship between Technological Capability and Foreign Direct Investment
AbstractThis paper reexamines the relationship between FDI and R&D by exploiting firm-level data for 118,300 Japanese manufacturers with no threshold. Our study confirms that the positive association between FDI and R&D is robust even if firms undertaking no FDI and/or no R&D are included. The inclusion of such firms, however, substantially attenuates the relationship. Higher technological capability is positively related with more extensive FDI, especially FDI in industrial countries by firms that have invested in Asia. Firms rich in human skills tend to prefer majority ownership in FDI, as predicted by the internalization FDI theory.
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Bibliographic InfoPaper provided by Research Institute for Economics & Business Administration, Kobe University in its series Discussion Paper Series with number 138.
Length: 26 pages
Date of creation: Jul 2003
Date of revision:
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Find related papers by JEL classification:
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
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- Sasidharan, Subash & Kathuria, Vinish, 2011. "Foreign Direct Investment and R&D: Substitutes or Complements--A Case of Indian Manufacturing after 1991 Reforms," World Development, Elsevier, vol. 39(7), pages 1226-1239, July.
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