Abstract

http://ssrn.com/abstract=1438049
 
 

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Firm Heterogeneity and Choice of Ownership Structure: An Empirical Analysis of German FDI in India


Holger Gorg


Kiel Institute for the World Economy; Institute for the Study of Labor (IZA)

Peter Nunnenkamp


University of Kiel

Verena Lauber


affiliation not provided to SSRN

Birgit Meyer


affiliation not provided to SSRN

2008

The University of Nottingham, GEP Research Paper 2008/39

Abstract:     
We contribute to the literature on the heterogeneity of multinational enterprises (MNEs) and the relevance of firm characteristics for analyzing the determinants of outward foreign direct investment (FDI). The focus is on the role of firm-level heterogeneity when MNEs decide on the share of ownership in foreign affiliates. We combine two firm-specific datasets on German MNEs with varying equity stakes in Indian affiliates. The impact of firm characteristics on ownership shares is assessed in the context of OLS and fractional logit models, controlling for industry and location characteristics. We show that the effect of several characteristics differs between the establishment of new affiliates by German MNEs and their engagement in already existing Indian firms. Most notably, the productivity of the German parents matters only for ownership shares in new affiliates.

Number of Pages in PDF File: 29

Keywords: multinational enterprises, firm characteristics, Indian locations, German FDI, ownership share

JEL Classification: F23, L25

working papers series


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Date posted: July 25, 2009  

Suggested Citation

Gorg, Holger and Nunnenkamp, Peter and Lauber, Verena and Meyer, Birgit, Firm Heterogeneity and Choice of Ownership Structure: An Empirical Analysis of German FDI in India (2008). The University of Nottingham, GEP Research Paper 2008/39. Available at SSRN: http://ssrn.com/abstract=1438049 or http://dx.doi.org/10.2139/ssrn.1438049

Contact Information

Holger Görg (Contact Author)
Kiel Institute for the World Economy ( email )
P.O. Box 4309
Kiel, D-24100
Germany
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
Peter Nunnenkamp
University of Kiel ( email )
D-24100 Kiel
Germany
Verena Lauber
affiliation not provided to SSRN ( email )
Birgit Meyer
affiliation not provided to SSRN ( email )
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