Monitoring Costs and the Mode of International Investment

Chu-Chia S. Lin and Ivan Png
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Chu-Chia S. Lin: National Chengchi University

Industrial Organization from University Library of Munich, Germany

Abstract: Our central proposition is that monitoring costs increase with physical distance, and hence, direct investments located further from the foreign investor’s home base should be more likely formed as joint ventures. Tests on a data set of Taiwanese direct investments in Mainland China provide robust support to the hypothesis. A project that was located 1000 kilometers further away was 13-17% more likely to be formed as a joint venture.

Keywords: contract; vertical integration; opportunism; international investment; China (search for similar items in EconPapers)
JEL-codes: F3 F4 K (search for similar items in EconPapers)
Pages: 26 pages
Date: 2002-08-25
Note: Type of Document - Acrobat PDF; prepared on IBM PC; to print on HP; pages: 26; figures: included
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Citations: View citations in EconPapers (5)

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Journal Article: Monitoring costs and the mode of international investment (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpio:0207012

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