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Does Home Country Institutional Quality Matter For Foreign Asset Divestitures?

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  • SONIA KETKAR

    (School of Public Policy, George Mason University, USA)

  • RAJA M. ALI SALEEM

    (School of Public Policy, George Mason University, USA)

Abstract

Foreign divestments have become a regular feature of global investment patterns. These divestments have mainly been explained by changes in the economic and institutional factors of the host countries. Recently, as institutional quality has improved in emerging economies, perceived risks have decreased and divestments can no longer be fully explained by host country factors. This paper examines the effects of a firm's home country institutional quality on its divestment decisions in foreign markets. It also studies whether these factors affect developed and developing host countries differently during normal and crises years.

Suggested Citation

  • Sonia Ketkar & Raja M. Ali Saleem, 2012. "Does Home Country Institutional Quality Matter For Foreign Asset Divestitures?," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 3(01), pages 1-16.
    • Handle: RePEc:wsi:jicepx:v:03:y:2012:i:01:n:s1793993312400029
    DOI: 10.1142/S1793993312400029
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    References listed on IDEAS

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    1. Eduardo Levy Yeyati & Christian Daude & Ernesto Stein, 2003. "Regional Integration and the Location of FDI," Business School Working Papers doce, Universidad Torcuato Di Tella.
    2. Rugman,Alan M., 2005. "The Regional Multinationals," Cambridge Books, Cambridge University Press, number 9780521842655.
    3. Raghuram G. Rajan, 2010. "Fault Lines: How Hidden Fractures Still Threaten the World Economy," Economics Books, Princeton University Press, edition 1, number 9111.
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    Cited by:

    1. Song, Sangcheol, 2014. "Unfavorable Market Conditions, Institutional and Financial Development, and Exits of Foreign Subsidiaries," Journal of International Management, Elsevier, vol. 20(3), pages 279-289.

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    More about this item

    Keywords

    Foreign investments; institutional factors; emerging economies; multinational enterprises; economic crisis; F23;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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