Determinants of International Activity: Evidence from the Chemical Industry

Andrea Fosfuri

No 4601, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This Paper empirically investigates two important determinants of international activity through wholly owned operations, joint-ventures and licensing, namely country risk and IPRs protection. Using a comprehensive database on investments in chemical plants during the period 1981-96, we show that higher levels of country risk are associated with less activity into recipient economies. The analysis also suggests that international activity with smaller resource commitment tends to be preferred in countries with higher levels of risk, and that multinational investment is more responsive to changes in risk conditions than indigenous investment. After controlling for several country characteristics, we do not find IPRs protection playing a significant role in fostering international activity or conditioning its mode.

Keywords: Foreign direct investment; Technology licensing; Country risk; Iprs protection; Chemical industry (search for similar items in EconPapers)
JEL-codes: F21 F23 O32 O34 (search for similar items in EconPapers)
Date: 2004-09
New Economics Papers: this item is included in nep-ino
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Citations: View citations in EconPapers (19)

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