Corporate governance and FDI: Firm-level evidence from Japanese FDI into the US

Peiming Wang, Joseph Alba and Donghyun Park

International Review of Economics & Finance, 2012, vol. 24, issue C, 43-50

Abstract: Better corporate governance can reduce the scope for increasing shareholder value and thus discourage M&A FDI inflows. Sound governance may also discourage non-M&A FDI inflows in light of the complementary relationship between M&A and non-M&A FDI. We use firm-level evidence to empirically examine the effect of US corporate governance on Japanese M&A and non-M&A FDI. We find that two landmark US corporate governance regulations help explain the sharp drop in both Japanese M&A and non-M&A FDI into the US during the 1990s. Our evidence suggests that corporate governance may affect both M&A and non-M&A FDI.

Keywords: Corporate governance; FDI; Merger and acquisition (search for similar items in EconPapers)
JEL-codes: F21 F23 G30 G34 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:24:y:2012:i:c:p:43-50

DOI: 10.1016/j.iref.2011.11.007

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