Ownership characteristics as determinants of FDI location decisions in emerging economies

Yung-Chih Lien and Igor Filatotchev

Journal of World Business, 2015, vol. 50, issue 4, 637-650

Abstract: Building on agency theory and international business research, this paper explores how parent firm and subsidiary ownership factors affect FDI location decisions in emerging economies. Our analysis suggests that ownerships of block-shareholders in the parent firm (i.e., controlling family, non-family TMT members and institutional investors) and equity stake in a subsidiary owned by the parent company are positively associated with FDI location decisions in less-explored and risky areas. However, the effects of parent firm and subsidiary ownership factors may substitute for each other with respect to their integrated effect on dealing with risks associated with FDI location decisions.

Keywords: FDI location choice; Emerging economies; Corporate governance; Multilevel analysis (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:worbus:v:50:y:2015:i:4:p:637-650

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DOI: 10.1016/j.jwb.2014.09.002

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