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Exports and FDI motivations: Empirical evidence from U.S. foreign subsidiaries

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  • Franco, Chiara

Abstract

Foreign direct investments (FDI) are supposed to bring into the host countries indirect benefits, usually referred as productivity spillover effects. However, an emerging literature analyses the effect with regard to the export performance of local firms finding inconclusive results. This literature is affected by two main shortcomings: firstly, the role played by FDI motivations is largely disregarded and, secondly, it is difficult to generalise results valid across countries. For these reasons, the aim of the paper is that of testing the effects of U.S. FDI on export intensity at the sectoral level in 16 OECD countries over the period 1990–2001 by bringing together international economics and international business perspective on FDI motivations. Through our data, we disentangle asset seeking and asset exploiting FDI motivations distinguishing also the channels through which the effect is going to occur. The findings show that asset exploiting motivations, and in particular market seeking FDI, are those that affect export intensity to a greater extent.

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  • Franco, Chiara, 2013. "Exports and FDI motivations: Empirical evidence from U.S. foreign subsidiaries," International Business Review, Elsevier, vol. 22(1), pages 47-62.
  • Handle: RePEc:eee:iburev:v:22:y:2013:i:1:p:47-62
    DOI: 10.1016/j.ibusrev.2012.02.002
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    Cited by:

    1. Yang, Yong & Mallick, Sushanta, 2014. "Explaining cross-country differences in exporting performance: The role of country-level macroeconomic environment," International Business Review, Elsevier, vol. 23(1), pages 246-259.
    2. Villaverde, José & Maza, Adolfo, 2015. "The determinants of inward foreign direct investment: Evidence from the European regions," International Business Review, Elsevier, vol. 24(2), pages 209-223.
    3. Rõõm, Tairi & Meriküll, Jaanika, 2014. "Are foreign-owned firms different? Comparison of employment volatility and elasticity of labour demand," Working Paper Series 1704, European Central Bank.
    4. Jaanika Merikull & Tairi Room, "undated". "Are foreign-owned firms different ? Comparision of employment volatility and elasticity of labour demand," Bank of Estonia Working Papers wp2014-1, Bank of Estonia.
    5. Jaanika Meriküll & Tairi Rõõm, 2014. "Are Foreign-Owned Firms Different? Comparison of Employment Volatility and Elasticity of Labour Demand," UCL SSEES Economics and Business working paper series 126, UCL School of Slavonic and East European Studies (SSEES).
    6. Denicolai, Stefano & Zucchella, Antonella & Strange, Roger, 2014. "Knowledge assets and firm international performance," International Business Review, Elsevier, vol. 23(1), pages 55-62.
    7. Cieślik, Jerzy & Kaciak, Eugene & Thongpapanl, Narongsak (Tek), 2015. "Effect of export experience and market scope strategy on export performance: Evidence from Poland," International Business Review, Elsevier, vol. 24(5), pages 772-780.

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    Keywords

    Exports; FDI motivations; Multinational enterprises; Spillover;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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