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Who goes where and how? Firm and country characteristics in the choice of FDI type and location
Author(s) -
Hyun HeaJung,
Hur Jung
Publication year - 2013
Publication title -
asian‐pacific economic literature
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.232
H-Index - 21
eISSN - 1467-8411
pISSN - 0818-9935
DOI - 10.1111/apel.12029
Subject(s) - foreign direct investment , multinational corporation , business , international economics , economics , international trade , economic geography , industrial organization , macroeconomics , finance
This paper examines the roles of firm and country characteristics in determining multinationals' choice of foreign direct investment ( FDI ) type and location. Using K orean firm‐level data, we find that highly productive firms are more likely than their less efficient counterparts to invest in tough markets and choose a combined FDI strategy rather than a solely horizontal FDI or vertical FDI strategy across host countries. These findings, consistent with recent theories in international economics, indicate that firm and country heterogeneities play a significant role in determining the FDI strategy of a multinational enterprise.