Who Goes Where and How? Firm Heterogeneity in the Choice of FDI Type and Location

Jung Hur and Hea-Jung Hyun

No 1105, Working Papers from Nam Duck-Woo Economic Research Institute, Sogang University (Former Research Institute for Market Economy)

Abstract: This paper examines the role of firm heterogeneity in the choice made by multinationals with regards to FDI type and location. Using Korean firm-level data, we find that highly productive firms are more likely than their less efficient counterparts to invest in tough markets and choose combined FDI strategy against either horizontal FDI or vertical FDI across different host countries. These findings, consistent with the recent theories in international economics, suggest that firm heterogeneity may play a significant role in FDI strategy as well as location decision.

Keywords: Foreign Direct Investment; Multinationals; Horizontal Investment; Vertical Investment; Firm Heterogeneity; Location Decision (search for similar items in EconPapers)
JEL-codes: D22 F23 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2011-08
New Economics Papers: this item is included in nep-bec and nep-int
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:sgo:wpaper:1105

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