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Foreign direct investment and global sourcing choices of firms in the US

Author

Listed:
  • Hong Y Park

    (College of Business and Management, Saginaw Valley State University, University Center, MI, USA)

Abstract

This paper investigates factors affecting the global sourcing choices of firms in the US: (1) US investment abroad; (2) foreign direct investment in the US; (3) wage-productivity ratio; and (4) transaction cost. I found that there is a statistically significant association between the country of sourcing choices and foreign direct investment. Both the wage-productivity ratios and transaction costs are not statistically significant at the conventional significance level, but their regression coefficients show proper signs. The paper also examines the patterns of foreign direct investment among countries and compares transaction costs by income group. Copyright © 2000 John Wiley & Sons, Ltd.

Suggested Citation

  • Hong Y Park, 2000. "Foreign direct investment and global sourcing choices of firms in the US," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 21(6), pages 211-221.
    • Handle: RePEc:wly:mgtdec:v:21:y:2000:i:6:p:211-221
    DOI: 10.1002/mde.983
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    References listed on IDEAS

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    1. Kang Rae Cho, 1990. "The Role of Product-Specific Factors in Intra-Firm Trade of U.S. Manufacturing Multinational Corporations," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 21(2), pages 319-330, June.
    2. Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
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    4. Riad A Ajami & David A Ricks, 1981. "Motives of Non-American Firms Investing in the United States," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 12(3), pages 25-34, September.
    5. Paul M Swamidass & Masaaki Kotabe, 1993. "Component Sourcing Strategies of Multinationals: An Empirical Study of European and Japanese Multinationals," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 24(1), pages 81-99, March.
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    Cited by:

    1. Sangcheol Song, 2015. "Inter-Country Exchange Rates and Intra-Firm Trade Flow Within Global Network of Multinational Corporations," Management International Review, Springer, vol. 55(1), pages 1-22, February.
    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. Hong Y. Park & C. Surender Reddy & Iksu Jurn, 2001. "Sourcing Strategies of Manufacturing Firms: Transaction Cost Implications," American Journal of Business, Emerald Group Publishing, vol. 16(2), pages 11-20.
    4. Trevino, Len J. & Grosse, Robert, 2002. "An analysis of firm-specific resources and foreign direct investment in the United States," International Business Review, Elsevier, vol. 11(4), pages 431-452, August.

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