Kiel Working Papers, Kiel Institute for World Economics
No 1841:
Ownership Choices of Indian Direct Investors: Do FDI Determinants Differ between Joint Ventures and Wholly-owned Subsidiaries?
Peter Nunnenkamp and Maximiliano Sosa Andrés
Abstract: Using count data on Indian joint ventures (JVs) and wholly
owned subsidiaries (WOS), we present an empirical analysis of FDI-related
ownership choices and their relation with host country characteristics and
indicators of transaction costs. Our Negative Binomial regression models
offer only weak support for the bargaining perspective, according to which
JVs should be more likely if the host countries were particularly
attractive in terms of market access or resource endowments. Geographical
and cultural distance has ambiguous effects on the choice between JVs and
WOS. The composition of FDI projects tends to shift toward WOS where
investment risks are contained by bilateral treaties and better control of
corruption
Keywords: outward FDI; ownership choices; transaction costs; host country characteristics; India; (follow links to similar papers)
JEL-Codes: F21; (follow links to similar papers)
37 pages, May 2013
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