The Role of Country-Of-Origin Characteristics for Foreign Direct Investment and Technical Cooperation in Post-Reform India

34 Pages Posted: 4 Jan 2017

See all articles by Axel Dreher

Axel Dreher

Heidelberg University

Peter Nunnenkamp

University of Kiel

Krishna Chaitanya Vadlamannati

University College Dublin (UCD) - Department of Politics

Multiple version iconThere are 2 versions of this paper

Date Written: June 2011

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

Suggested Citation

Dreher, Axel and Nunnenkamp, Peter and Vadlamannati, Krishna Chaitanya, The Role of Country-Of-Origin Characteristics for Foreign Direct Investment and Technical Cooperation in Post-Reform India (June 2011). World Development, Vol. 44, 2013. Available at SSRN: https://ssrn.com/abstract=2892207

Axel Dreher

Heidelberg University ( email )

Grabengasse 1
Heidelberg, 69117
Germany

HOME PAGE: http://www.axel-dreher.de

Peter Nunnenkamp

University of Kiel ( email )

D-24100 Kiel
Germany

Krishna Chaitanya Vadlamannati (Contact Author)

University College Dublin (UCD) - Department of Politics ( email )

Belfield
Dublin 4
Ireland

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