Capital Endowment, Credit Constraint and FDI: Analysis Based on Heterogeneous Firms

Junjiang Li (), Lei Hou () and Jiarui Zhang ()
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Junjiang Li: School of Economics, Jilin University, Changchun 130012, China
Lei Hou: School of Economics, Jilin University, Changchun 130012, China
Jiarui Zhang: Department of Economics, University of Munich, Munich 80539, Germany

Frontiers of Economics in China-Selected Publications from Chinese Universities, 2011, vol. 6, issue 1, 55-75

Abstract: To examine the impact of capital endowment and credit constraint on firms¡¯ FDI decisions, we build a model of investment portfolio based on heterogeneous firms setup. We find that financial factors matter for firms¡¯ internationalization. More capital endowment or less credit constraint lowers cutoff productivity for firms to do FDI.

Keywords: capital endowment; credit constraint; FDI; heterogeneous firms; productivity (search for similar items in EconPapers)
JEL-codes: F23 G11 G32 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (2)

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