FDI, Ownership Structure, and Productivity

Tadashi Ito and Ayumu Tanaka

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: The standard firm heterogeneity model of FDI considers the case of whole ownership of foreign affiliates. However, there exist many partially-owned foreign affiliates. This paper builds a model based on Helpman et al. (2004) to allow various ownership structures and posits some testable hypotheses on the relationship between productivity and ownership shares/structures. The empirical part corroborates these hypotheses, showing that high productivity firms have higher ownership share in their affiliates and lower productivity firms tend to opt for joint-ventures with wholesalers and/or local/3rd country partners.

Pages: 22 pages
Date: 2020-03
New Economics Papers: this item is included in nep-eff, nep-int and nep-sbm
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https://www.rieti.go.jp/jp/publications/dp/20e017.pdf (application/pdf)

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Journal Article: FDI, ownership structure, and productivity (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:20017

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