Kiel Working Papers, Kiel Institute for World Economics
No 1708:
The Role of Country-of-origin Characteristics for Foreign Direct Investment and Technical Cooperation in Post-reform India
Axel Dreher, Peter Nunnenkamp and Krishna Chaitanya Vadlamannati
Abstract: The decisions of foreign investors on technical
cooperation versus equity engagements and on the degree of ownership in FDI
projects are likely to depend on their relative bargaining position
vis-à-vis the host country. India provides an interesting case for
analyzing the interplay between country-of-origin characteristics and
host-country characteristics and their respective effects on ownership
decisions since opening up its economy to FDI in the early 1990s. We
perform negative binominal regressions by making use of a unique dataset on
about 24,500 technical cooperation and FDI projects by investors from 45
countries of origin over the 1991-2004 period. We find that relative market
size, relative financial market development, relative risk, relative
endowment of human capital and previous international experience
significantly affect the type of engagement by foreign investors in
post-reform India
Keywords: foreign investors, countries of origin, joint ventures, technical cooperation, India; (follow links to similar papers)
JEL-Codes: F23,; L24; (follow links to similar papers)
33 pages, June 2011
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