Economics at your fingertips  

Drivers of divestment decisions of multinational enterprises - A cross-country firm-level perspective

Maria Borga, Perla Ibarlucea Flores and Monika Sztajerowska
Additional contact information
Maria Borga: OECD
Perla Ibarlucea Flores: OECD
Monika Sztajerowska: OECD

No 2019/03, OECD Working Papers on International Investment from OECD Publishing

Abstract: Divestment by multinational enterprises is an important yet understudied phenomenon. The few available estimates indicate that about a fifth of all foreign affiliates are divested every five years. This paper presents the findings from a novel cross-country firm-level dataset with financial and ownership information for over 62 000 foreign-owned affiliates from a selection of 41 OECD and G20 countries and their economic groups from 164 home countries for the period 2007-2014. The data allow an assessment of the relative importance of different determinants of divestment in a cross-country setting, including host country policies and bilateral factors, including trade, investment and tax agreements. The findings confirm that parents divested about one of every five foreign-owned affiliates between 2007-2014 and show that a number of host country policy and economic factors, including labour costs and international trade agreements, influence the divestment decision, on top of the firm considerations considered in previous studies.

Keywords: Bilateral Investment Treaties; Divestment; Double Taxation Agreements; International Investment; Multinational Firms; Preferential Trade Agreements (search for similar items in EconPapers)
JEL-codes: F13 F14 F15 F23 F53 (search for similar items in EconPapers)
Date: 2020-01-15
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this paper

More papers in OECD Working Papers on International Investment from OECD Publishing Contact information at EDIRC.
Bibliographic data for series maintained by ().

Page updated 2021-09-04
Handle: RePEc:oec:dafaaa:2019/03-en