Firm heterogeneity, industry characteristics and types of FDI: the case of German FDI in the Czech Republic

Holger Görg, Henning Mühlen and Peter Nunnenkamp

No 1544, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: In addition to firm and industry characteristics, the heterogeneity of foreign direct investment (FDI) has to be taken into account when analyzing the determinants of outward FDI. We combine two firm-specific datasets on German firms with subsidiaries and joint ventures in the Czech Republic, compared to a control group of German firms without FDI in this host country. The impact of firm and industry characteristics on FDI decisions is assessed by estimating two-step Heckman models. We find that larger, more productive and more experienced firms are more likely to invest in the Czech Republic. Firm characteristics also affect the size of FDI in manufacturing. The relevance of both firm and industry characteristics critically depends on whether FDI is horizontal or vertical.

Keywords: Multinational enterprises; firm heterogeneity; industry characteristics; sector-specific FDI; vertical and horizontal FDI (search for similar items in EconPapers)
JEL-codes: F23 L25 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Firm Heterogeneity, Industry Characteristics and Types of FDI: The Case of German FDI in the Czech Republic (2010)
Working Paper: Firm Heterogeneity, Industry Characteristics and Types of FDI: The Case of German FDI in the Czech Republic (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1544

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