IDEAS home Printed from https://ideas.repec.org/a/bpj/glecon/v15y2015i1p1-24n8.html
   My bibliography  Save this article

Does Experience Matter for Patterns of Expansion by US Companies in Latin America and the Caribbean?

Author

Listed:
  • Charles Sawyer W.

    () (Department of Economics, Texas Christian University, 2800 S University Dr, Fort Worth, TX 76129, USA)

  • B. Wooster Rossitza

    () (Department of Economics, Portland State University, P.O. Box 751, Portland, OR 97207-0751, USA)

  • R. Blanco Luisa

    () (School of Public Policy, Pepperdine University, 24255 Pacific Coast Hwy, Malibu, CA 90263, USA)

Abstract

We describe expansion patterns by US companies in Latin America and the Caribbean (LAC) between 1980 and 2005 using a unique sample that utilizes country, industry and time-series information on firms’ investments. We build on previous research to explore the effect of experience on firms’ preference for equity commitment. Using the time-series properties of our data, we examine the extent to which previous investments in the region influence firms’ expansion patterns. Our analysis includes the traditional determinants of entry mode choices such as firm-specific factors, market-seeking factors, resource-seeking factors and country-specific factors. Bivariate probit results indicate that companies with previous experience in the region are more likely to commit equity going forward and this also holds for more recent companies with greater growth opportunities.

Suggested Citation

  • Charles Sawyer W. & B. Wooster Rossitza & R. Blanco Luisa, 2015. "Does Experience Matter for Patterns of Expansion by US Companies in Latin America and the Caribbean?," Global Economy Journal, De Gruyter, vol. 15(1), pages 1-24, March.
  • Handle: RePEc:bpj:glecon:v:15:y:2015:i:1:p:1-24:n:8
    as

    Download full text from publisher

    File URL: https://www.degruyter.com/view/j/gej.2015.15.issue-1/gej-2014-0060/gej-2014-0060.xml?format=INT
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Markusen, James R. & Venables, Anthony J., 1999. "Foreign direct investment as a catalyst for industrial development," European Economic Review, Elsevier, vol. 43(2), pages 335-356, February.
    2. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
    3. Galan, Jose I. & Gonzalez-Benito, Javier, 2006. "Distinctive determinant factors of Spanish foreign direct investment in Latin America," Journal of World Business, Elsevier, vol. 41(2), pages 171-189, June.
    4. Beata S. Javorcik & Kamal Saggi, 2010. "Technological Asymmetry Among Foreign Investors And Mode Of Entry," Economic Inquiry, Western Economic Association International, vol. 48(2), pages 415-433, April.
    5. Wooster, Rossitza B. & Blanco, Luisa & Sawyer, W. Charles, 2016. "Equity commitment under uncertainty: A hierarchical model of real option entry mode choices," International Business Review, Elsevier, vol. 25(1), pages 382-394.
    6. Donna L Paul & Rossitza B Wooster, 2008. "Strategic investments by US firms in transition economies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(2), pages 249-266, March.
    7. Keith D Brouthers, 2002. "Institutional, Cultural and Transaction Cost Influences on Entry Mode Choice and Performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 33(2), pages 203-221, June.
    8. Kogut, Bruce & Chang, Sea Jin, 1991. "Technological Capabilities and Japanese Foreign Direct Investment in the United States," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 401-413, August.
    9. Blanco, Luisa R., 2012. "The Spatial Interdependence of FDI in Latin America," World Development, Elsevier, vol. 40(7), pages 1337-1351.
    10. Busakorn Chantasasawat & K. C. Fung & Hitomi Iizaka & Alan Siu, 2010. "FDI Flows to Latin America, East and Southeast Asia, and China: Substitutes or Complements?," Review of Development Economics, Wiley Blackwell, vol. 14(s1), pages 533-546, August.
    11. T Agmon, 2003. "Who gets what: the MNE, the national state and the distributional effects of globalization," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 34(5), pages 416-427, September.
    12. Bouët, Antoine & Berisha-Krasniqi, Valdete & Estrades, Carmen & Laborde, David, 2012. "Trade and investment in Latin America and Asia: Perspectives from further integration," Journal of Policy Modeling, Elsevier, vol. 34(2), pages 193-210.
    13. Pietra Rivoli & Eugene Salorio, 1996. "Foreign Direct Investment and Investment under Uncertainty," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 27(2), pages 335-357, June.
    14. Head, Keith & Ries, John, 2008. "FDI as an outcome of the market for corporate control: Theory and evidence," Journal of International Economics, Elsevier, vol. 74(1), pages 2-20, January.
    15. Doytch, Nadia & Uctum, Merih, 2011. "Does the worldwide shift of FDI from manufacturing to services accelerate economic growth? A GMM estimation study," Journal of International Money and Finance, Elsevier, vol. 30(3), pages 410-427, April.
    16. Lilia Cavallari & Stefano d'Addona, 2013. "Nominal and real volatility as determinants of FDI," Applied Economics, Taylor & Francis Journals, vol. 45(18), pages 2603-2610, June.
    17. Henisz, Witold J, 2000. "The Institutional Environment for Multinational Investment," Journal of Law, Economics, and Organization, Oxford University Press, vol. 16(2), pages 334-364, October.
    18. Miguel D. RamírezAuthor-Email: Miguel.Ramirez@trincoll.edu, 2006. "Does foreign direct investment enhance private capital formation in Latin America? a pooled analysis for the 1981-2000 period," Journal of Developing Areas, Tennessee State University, College of Business, vol. 40(1), pages 81-97, September.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:glecon:v:15:y:2015:i:1:p:1-24:n:8. 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: (Peter Golla). General contact details of provider: https://www.degruyter.com .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.