Strategic FDI and Industrial Ownership Structure

19 Pages Posted: 14 Nov 2002

See all articles by Christopher J. Ellis

Christopher J. Ellis

University of Oregon - Department of Economics

Dietrich Fausten

Monash University - Department of Economics

Abstract

We argue that different industrial ownership structures generate different incentives for firms to engage in FDI. A comparison is made between (partially) cooperative structures such as the Japanese kieretsu and Korean chaebol systems and competitive structures such as U.S. firms. It is found that ownership structure has significant implications for the probability of initial FDI. Whether or not a cooperative structure is also coordinated turns out to be crucial in predicting FDI behaviour. This has further implications for the optimal FDI incentives of potential host countries and for how empirical studies might be designed.

JEL Classification: F10, F21, F23

Suggested Citation

Ellis, Christopher J. and Fausten, Dietrich, Strategic FDI and Industrial Ownership Structure. Available at SSRN: https://ssrn.com/abstract=318615

Christopher J. Ellis (Contact Author)

University of Oregon - Department of Economics ( email )

Eugene, OR 97403
United States

Dietrich Fausten

Monash University - Department of Economics ( email )

Wellington Road
Clayton, Victoria 3
Australia

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