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Monitoring Costs and the Mode of International Investment

  • Chu-Chia S. Lin

    (National Chengchi University)

  • Ivan P.L. Png

    (National University of Singapore)

Our central proposition is that monitoring costs increase with physical distance, and hence, direct investments located further from the foreign investor’s home base should be more likely formed as joint ventures. Tests on a data set of Taiwanese direct investments in Mainland China provide robust support to the hypothesis. A project that was located 1000 kilometers further away was 13-17% more likely to be formed as a joint venture.

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File URL: http://econwpa.repec.org/eps/io/papers/0207/0207012.pdf
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Paper provided by EconWPA in its series Industrial Organization with number 0207012.

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Length: 26 pages
Date of creation: 25 Aug 2002
Date of revision:
Handle: RePEc:wpa:wuwpio:0207012
Note: Type of Document - Acrobat PDF; prepared on IBM PC; to print on HP; pages: 26; figures: included
Contact details of provider: Web page: http://econwpa.repec.org

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