Who Goes Where and How? Firm Heterogeneity in the Choice of FDI Type and Location
AbstractThis paper examines the role of firm heterogeneity in the choice made by multinationals with regards to FDI type and location. Using Korean firm-level data, we find that highly productive firms are more likely than their less efficient counterparts to invest in tough markets and choose combined FDI strategy against either horizontal FDI or vertical FDI across different host countries. These findings, consistent with the recent theories in international economics, suggest that firm heterogeneity may play a significant role in FDI strategy as well as location decision.
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Bibliographic InfoPaper provided by Research Institute for Market Economy, Sogang University in its series Working Papers with number 1105.
Length: 26 pages
Date of creation: Aug 2011
Date of revision:
Foreign Direct Investment; Multinationals; Horizontal Investment; Vertical Investment; Firm Heterogeneity; Location Decision;
Find related papers by JEL classification:
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-11-28 (All new papers)
- NEP-BEC-2011-11-28 (Business Economics)
- NEP-INT-2011-11-28 (International Trade)
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