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Firm Heterogeneity, Industry Characteristics and Types of FDI: The Case of German FDI in the Czech Republic

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  • Mühlen, Henning
  • Görg, Holger
  • Nunnenkamp, Peter

Abstract

In addition to firm and industry characteristics, the heterogeneity of foreign direct investment (FDI) has to be taken into account when analyzing the determinants of outward FDI. We combine two firm-specific datasets on German firms with subsidiaries and joint ventures in the Czech Republic, compared to a control group of German firms without FDI in this host country. The impact of firm and industry characteristics on FDI decisions is assessed by estimating two-step Heckman models. We find that larger, more productive and more experienced firms are more likely to invest in the Czech Republic. Firm characteristics also affect the size of FDI. However, the relevance of firm and industry characteristics differs between the manufacturing and services sectors and depends on whether FDI is horizontal or vertical. --

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Bibliographic Info

Paper provided by Kiel Institute for the World Economy (IfW) in its series Open Access Publications from Kiel Institute for the World Economy with number 37268.

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Date of creation: 2010
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Handle: RePEc:zbw:ifwkie:37268

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Keywords: multinational enterprises; firm heterogeneity; industry characteristics; sectorspecific FDI; vertical and horizontal FDI;

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Cited by:
  1. Fortanier, Fabienne & van Wijk, Jeroen, 2010. "Sustainable tourism industry development in sub-Saharan Africa: Consequences of foreign hotels for local employment," International Business Review, Elsevier, vol. 19(2), pages 191-205, April.
  2. Daniel Munich & Martin Srholec & Michael Moritz & Johannes Schaffler, 2012. "Mothers and Daughters: Heterogeneity of German Direct Investments in the Czech Republic," CERGE-EI Working Papers wp467, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  3. Liu, Wan-Hsin & Nunnenkamp, Peter, 2011. "Domestic Repercussions of Different Types of FDI: Firm-Level Evidence for Taiwanese Manufacturing," World Development, Elsevier, vol. 39(5), pages 808-823, May.
  4. Michael Moritz & Johannes Schaeffler, 2012. "Regional Distribution of German-Czech Multinationals on the Domestic Market," ERSA conference papers ersa12p519, European Regional Science Association.

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