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The Role of Country-of-origin Characteristics for Foreign Direct Investment and Technical Cooperation in Post-reform India

Author

Listed:
  • Axel Dreher

    (University of Heidelberg)

  • Peter Nunnenkamp

    (Kiel Institute for the World Economy)

  • Krishna Chaitanya Vadlamannati

    (University of Heidelberg)

Abstract

The decisions of foreign investors on technical cooperation versus equity engagements and on the degree of ownership in FDI projects are likely to depend on their relative bargaining position vis-à-vis the host country. India provides an interesting case for analyzing the interplay between country-of origin-characteristics and host-country-characteristics and their respective effects on ownership decisions since opening up its economy to FDI in the early 1990s. We perform negative binominal regressions by making use of a unique dataset on about 24,500 technical cooperation and FDI projects by investors from 45 countries of origin over the 1991-2004 period. We find that relative market size, relative financial market development, relative risk, relative endowment of human capital and previous international experience significantly affect the type of engagement by foreign investors in post-reform India.

Suggested Citation

  • Axel Dreher & Peter Nunnenkamp & Krishna Chaitanya Vadlamannati, 2011. "The Role of Country-of-origin Characteristics for Foreign Direct Investment and Technical Cooperation in Post-reform India," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 81, Courant Research Centre PEG.
    • Handle: RePEc:got:gotcrc:081
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    Cited by:

    1. Frank Bickenbach & Wan-Hsin Liu & Peter Nunnenkamp, 2015. "Regional concentration of FDI in post-reform India: A district-level analysis," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 24(5), pages 660-695, August.
    2. Peter Nunnenkamp & Maximiliano Sosa Andrés, 2014. "Ownership Choices of Indian Direct Investors: Do FDI Determinants Differ between Joint Ventures and Wholly Owned Subsidiaries?," South Asian Journal of Macroeconomics and Public Finance, , vol. 3(1), pages 39-78, June.

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    More about this item

    Keywords

    foreign investors; countries of origin; joint ventures; technical cooperation; India;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures

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