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The role of firm ownership in policy competition for foreign direct investment between asymmetric countries

Yasuo Sanjo

International Review of Economics & Finance, 2015, vol. 35, issue C, 110-121

Abstract: This study develops a two-country policy competition model for foreign direct investment between asymmetric countries. It analyzes how firm ownership via foreign capital affects the investment location choice of the foreign firm, and policy competition between the potential host countries. The findings show that the inflow of foreign capital changes the investment location choice of the foreign firm, as does policy competition between the host countries. Further, an increase in the inflow of foreign capital to a domestic firm in the host country heightens the country's attractiveness as an investment location.

Keywords: Foreign direct investment; Policy competition; Role of firm ownership; Location choice (search for similar items in EconPapers)
JEL-codes: F12 F23 H25 L13 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:35:y:2015:i:c:p:110-121

DOI: 10.1016/j.iref.2014.09.009

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